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 BanRep Preview - Jan 2022
Executive Summary
- The majority of surveyed analysts expect the Colombian Central Bank to accelerate the pace of tightening at their January meeting, with a 75bp hike to 3.75% touted as the most likely option.
- Continued domestic and global inflationary pressures, strong growth momentum and more hawkish rhetoric from global central banks should support the decision for stronger action.
- Indeed, with three members already voting for a 75bp hike in December, the decision should not come as a surprise for markets.
- The risks appear skewed to the hawkish side, with a small minority forecasting a bolder 100bp hike.
For the full preview click here: MNI BanRep Preview - January 2022.pdf
Growth and Inflation Point To Tightening Pace Acceleration
Growth momentum remained firm with November economic activity printing at 9.6%, above the 8.6% median estimate and versus 9.3% in October. There have been no new major covid related restrictions and analysts expect the strong pace of growth to be sustained through 2022. Increasing domestic demand and recovering activity point to a rapidly narrowing output gap which bolsters the argument to accelerate the pace of tightening. Moreover, large external financing needs amid tightening external market conditions add weight to the call.
December inflation continued to surprise to the upside, showing a 0.73% M/m advance, bringing the annual headline rate to 5.62%, the highest level seen in five years. Core CPI rose to 3.44% Y/y from 3.37%, edging further away from the target rate of 3%.
Inflation expectations have also continued to deteriorate. In the latest central bank survey, the median estimate of Colombia economists for year-end 2022 CPI was raised substantially to 4.48% Vs. 3.86%. Furthermore, evidence of a contamination of medium-term expectations, the 2023 year-end forecast was revised to 3.5% from 3.3% in December. Within the survey, economists expect the next rate move to be a 75bp move this month.
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.