BOGOTA (Reuters) – Analysts are split between those who expect Colombia’s central bank to moderately raise its benchmark interest rate next week and others who expect a hike in line with previous moves amid further inflationary growth, a Reuters poll showed on Friday.
Eight of 17 analysts surveyed expect the central bank to raise the benchmark interest rate by 100 basis points to 10%, while eight others expect a 150 basis point hike – similar to meetings previous ones – which would bring the rate to 10.50. %.
One analyst found himself in the middle, betting on a 125 basis point hike, which would leave the benchmark rate at 10.25%.
Raising the rate by 100 basis points would take it to its highest level since July 2008; Raising it by 150 basis points would see it at its highest since July 2001, according to central bank figures.
“Inflation in July and August continued to surprise on the upside by a wide margin (especially in August) and suggests that the bank’s recent forecast for the coming quarters will need to be revised upwards significantly,” Andres said. Pardo, chief macroeconomic strategist of XP Investments. for Latin America.
The evolution of Colombia’s interest rates is aligned with monetary policy in the United States and Europe, in the context of dynamic local consumption and the depreciation of the Colombian peso, which fell by 10% in 2022, contributing to pushing 12-month inflation to 10.84% in August.
Colombian inflation is at its highest level since April 1999 and has more than tripled the central bank’s 3% target.
The monetary policy authority has raised its benchmark interest rate by 725 basis points to 9% since September last year.
The poll’s median forecast sees the rate end the year at 11%, before the bank’s board gradually lowers it to 8.25% in 2023.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by Andrea Ricci and Diane Craft)
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