Bank of Colombia to raise rate in December-Reuters
2022.12.12 11:39
Bank of Colombia to raise rate in December-Reuters
Budrigannews.com – According to a poll conducted by Reuters on Monday, the central bank of Colombia is expected to raise its key interest rate this week at its final meeting of the year. As inflation expectations continue to rise and economic growth remains potential, the central bank will be under pressure for another increase beginning in 2023.
According to the survey, 13 out of 14 analysts predicted that the central bank would raise benchmark interest rates by 100 basis points to 12% this month, while one forecasted a half-point increase to 11.5 percent.
On the off chance that the larger part market figure is met, loan costs could arrive at levels concealed since December 1999 and would have ascended by 1,025 premise focuses starting from the start of the vertical cycle in September last year.
According to Felipe Klein, a Latin America economist at BNP Paribas (OTC:), “Inflation is not easing, expectations of inflation are likely to continue to rise, and the output gap remains positive, which is reflected in a larger current account deficit.” who stated that the seven-member board of the bank will split the decision.
More Americans expect inflation to decline-survey
After inflation surprised on the upside once more in November by reaching 12.53% on a cumulative annual basis, its highest level since March 1999, the majority of analysts now believe the monetary authority will enact another rate hike in January. Previously, analysts had predicted that the rate’s upward cycle would come to an end in December.
Analysts and the central bank agree that inflation will not reach its long-term goal of 3% until the end of 2024.
The increase in the minimum wage for the upcoming year, which analysts anticipate will be around 15%, will only serve to exacerbate the upward pressures on prices.
According to a statement made by JPMorgan (NYSE:), “We are expecting a minimum wage hike around 15%, which would be at the low end of the range being discussed by local observers, but would still feed a strong indexation dynamic keeping inflation under pressure in 1H23.” in a memo.
“Our current expectation is for BanRep to announce a final 50bp hike at the meeting in January.”
The median of the poll says that the benchmark interest rate will be 9.75% at the end of next year and 6.25 percent by the end of 2024.
