The Central Bank of Colombia (BanRep) raised its key interest rate by 25bps to 13.25%. Analysts at TD Securities think this was the last hike in the cycle and they warn that after the recent Cabinet reshuffle form the President, the central bank has now additional reasons to be cautious in coming months.
“We think BanRep has hit terminal rate at 13.25%. As we expected, the central bank deployed another 25bp rate hike in a decision by majority. The wording of the forward guidance did not provide a hint on the central bank hitting terminal after today's meeting. Once more, it was stated that future decisions will depend on incoming data. However, based on our prospects for inflation, inflation expectations and economic activity in the run up to the next monetary policy decision (June 30), we think this was the last hike in the cycle.”
“BanRep has now additional reasons to be cautious in coming months. Up to April 25, we thought a data-dependent approach in the aftermath of April's monetary policy decision will focus on incoming inflation data, expectation surveys, and activity figures in the interim before the start of a cutting cycle. However, after the Cabinet reshuffle that took place on April 26, certain idiosyncratic factors have returned to the spotlight in the form of renewed fiscal and policy uncertainty.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.