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Scotiabank: Moderation Of Activity Would Trigger Wait and See Approach

COLOMBIA
  • Scotiabank expect the debate between still high inflation and weaker economic activity to intensify at the October BanRep decision, showing the possibility of a new split vote between 50bps and 100bps.
  • For now, they maintain their call for a 50bp hike, as concerns about economic deceleration intensify. However, this will need to be confirmed by incoming economic activity indicators.
  • The terminal rate, for now, is expected at 10.50% as their base case scenario points to a moderation in economic activity by end-2022, which would trigger a “wait and see” approach from BanRep.
  • For reference, the next meeting/decision is scheduled for October 28.

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