Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI Colombia Central Bank Preview - April 2023
Executive Summary
- Forecasters remain evenly split over this month’s BanRep meeting. Due to a narrow advantage among surveyed analysts, the most probable outcome for this week’s decision will be an unchanged decision, maintaining the overnight rate at 13.00%.
- However, there are several analysts that believe the committee will vote for another 25bp increase to 13.25%, with either possibility likely resulting in the end of the tightening cycle.
- Despite the obvious pressures on both headline and core CPI which could favour additional monetary tightening, improving inflation expectations, a decelerating growth profile and most recent central bank board rhetoric suggest the board may opt to stand pat at this juncture.
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MNI Colombia Central Bank Preview - April 2023.pdf
Governor Villar Points To Peso Appreciation Helping Contain Pressures
BanRep Governor, Leonardo Villar, has been vocal that the prospects are for inflation to slow significantly over the next months. Speaking on the sidelines of the IMF Spring meeting in Washington, Villar added that he is unsure whether the economy needs more interest rate hikes. He expects the Colombian economy to decelerate and post a very low growth rate this year which should help curb inflation. Furthermore, the governor stated that the recent peso rally will help contain inflationary pressures.
While the governor’s comments may tip the balance towards an unchanged decision at this meeting, central bank co-director Steiner has confirmed there are a set of pre-conditions to be met before rate cuts can be considered. Speaking in a conference organized by BTG Pactual, Steiner stated that Colombia needs to see a trend of slowing inflation and a consolidated drop in inflation expectations before cutting interest rates. While it is reasonable to think inflation reached its peak, in his particular position, just one month of slow inflation data isn’t enough to consider rate cuts, but several months are needed.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.