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 - June 2023
Executive Summary
- Forecasters unanimously expect the Colombian central bank to keep the overnight lending rate unchanged at 13.25%.
- The market remains confident that the 25bp rate hike in April, in the aftermath of the most recent cabinet reshuffle, marked the conclusion of the tightening cycle.
- Furthermore, the continued outperformance of the Colombian peso is likely to bolster an already improving inflation outlook, which in turn should make BanRep more comfortable keeping policy steady at this juncture and keeps the probability of a unanimous decision high.
- The focus going forward now turns to when the central bank may envisage commencing rate cuts, a topic that has garnered increased attention following the latest comments from the newly-appointed finance minister.
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MNI Colombia Central Bank Preview - June 2023.pdf
Finance Minister Bonilla Highlights September As Potential Easing Date
The most recent communication from the central bank’s MPC came from its newest member, the recently appointed finance minister, Ricardo Bonilla. Speaking in an interview last week, Bonilla stated “we expect that interest rates will stay unchanged this month, and we’ll monitor for the next two or three months until September, when we’ll anlayze where interest rates can start to come down.” He later noted that he could easily see the bank cutting interest rates by two percentage points by the end of 2023.
The comments had a significant impact on the front end of the IBR swaps curve with one-year swap rates extending their shift lower throughout June to around 90bps on the expectation of earlier easing.
Governor Villar Reiterates Peso Appreciation To Accelerate Inflation Convergence To Target
BanRep Governor, Leonardo Villar, has reiterated that the ongoing strength of the nation’s currency will help ease inflation and should accelerate the pace at which headline inflation will converge to target. The impressive extension of USDCOP weakness has seen the pair trade as low as 4084, an impressive 18.5% lower than the year’s peak. This extends the Peso’s appreciation a further 10% from the April meeting.
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.