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Scotiabank Expecting 50BP Cut Later This Month

COLOMBIA
  • According to Scotiabank, yesterday’s economic activity results in Colombia suggest that sectors such as industry and construction continue to perform weaker than expected, reflecting the impact of high interest rates on the economy and the decline in household demand.
  • However, agriculture and mining, along with public services, public administration, and arts and entertainment, are the sectors that have contributed most to boosting economic activity in February.
  • Scotiabank’s call is for a 50bp BanRep cut on April 30 to 11.75%, probably in a split vote. The board’s main concern remains the risk premiums that could be reflected in the exchange rate and delay the convergence of inflation to the target. However, economic activity continues to show concerning signals in some relevant sectors.
  • Scotiabank expect the central bank to accelerate the easing cycle towards the end of the year to close at 8.25%.

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