Colombia central bank reportedly seen holding rate again in late September
TLT•A Reuters poll found that 19 of 27 analysts expect Colombia’s central bank to hold its benchmark rate at 12% on September 30, despite persistent inflationary pressures.
1. Rate hold expected
Nineteen of 27 analysts expect the central bank to keep its benchmark rate at 12% at its September 30 meeting. It would be the second consecutive pause after rate hikes in January, March and June totaled 275 basis points; there was no meeting in August.
2. Economic pressures
Analysts cited the August earthquake and reconstruction needs, as well as the Colombian peso’s 3.4% appreciation against the U.S. dollar over the past three months, as factors that could temper the board’s tone. Government estimates put reconstruction costs above 30 trillion Colombian pesos ($8.9 billion). A minority of analysts expect rate increases to resume after September, citing inflation pressures and possible food and energy price increases linked to El Niño.
