INSUBCONTINENT EXCLUSIVE:
The board last adjusted rates on July 31, reducing them by 50 basis points to 10.75%.Market analysts now anticipate a more aggressive cut of
75 basis points, following recent inflation data showing a sharper deceleration.According to the National Administrative Department of
expectations for a bolder move by the central bank
realized, this would mark the seventh consecutive rate cut since the bank began its easing cycle in December last year
Such a reduction would bring rates back to levels last seen in September 2022, exactly two years ago.Central Bank of Colombia Cuts Interest
(Photo Internet reproduction)While 12 of the 23 analysts surveyed expect this 75 basis point cut, the remainder anticipate a more modest 50
the more conservative forecast.He notes that despite falling inflation, several board members emphasize the importance of convergence
towards structurally lower levels
He points out regional trends, such as Brazil raising interest rates and Mexico slowing its rate cuts.He suggests that aggressive cuts by
Colombia could misalign it with regional rates, potentially pressuring the currency
Conversely, Grupo Bancolombia projects that the Central Bank has room to accelerate rate cuts to 75 basis points.This divergence in
expectations highlights the complexity of the decision facing the board today
