By Nelson Bocanegra
BOGOTA (Reuters) – Colombia’s central bank board looks set on Monday to resume cuts to its benchmark interest rate with the support of new board members, despite inflation pressures and a difficult fiscal situation.
Sixteen of 21 analysts polled by Reuters in a recent survey predicted the monetary authority would cut its benchmark interest rate by 25 basis points to 9.25% this month, while one analyst forecast a larger 50-basis-point cut to 9.00%.
The remaining four predicted the rate would be maintained at 9.50%.
“The arrival of two new board members and the new finance minister could change the balance of the board and with that, the expectations about its future decisions and the country’s monetary policy,” investment holding company Corfi said in a note.
Monday will mark the first interest rate votes by Laura Moisa-Elicabide and Cesar Giraldo, who were recently named to the seven-member board by President Gustavo Petro, and by new finance minister German Avila, who told journalists on Thursday he would opt for a rate cut.
But other analysts say there is a chance the board will hold the rate.
“The complex fiscal situation, the uptick in inflation and the prudence of central banks in the United States and the region support a new pause,” said Alianza brokerage in a note.
The board decided by majority to hold the rate at its last vote in January, the first pause since a reduction cycle began in December 2023.
According to the Reuters survey, the benchmark rate will end this year at 7.75%, compared to the 7% predicted in the previous survey.
(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb, Editing by William Maclean)
