Colombia central bank seen raising rate to 3%, continuing hikes in 2022
Reuters
Published Dec 13, 2021 08:45AM ET
By Nelson Bocanegra
BOGOTA (Reuters) - Colombia's central bank board is expected to raise the benchmark interest rate by 50 basis points to 3% this week and continue increases throughout 2022 as policymakers try to tamp down above-target inflation, a Reuters survey showed on Monday.
Twenty-one analysts said in a survey a half-point increase at the board's last meeting of the year will likely be backed by a majority of the seven policymakers though some will support a more gradual 25 basis point rise.
If the half-point rise goes ahead, the interest rate will have been raised 125 basis points since September, when the board began a cycle of increases.
"Taking into account that total inflation is at 5.26% and there will be additional inflationary pressures in the coming months, we expect the central bank to increase the rate by 50 basis points," brokerage Alianza Valores said in a report.
"Notwithstanding, there is a possibility the increase could be 75 basis points, with a divided vote," it added.
Consumer prices increased 5.26% in the 12 months through November, well above both expectations and the bank's long-term target rate of 3%.
The board will probably back another rate uptick in January, the analysts said, and the rate will end next year at 5%, according to median estimates in the survey, as inflationary pressures and global supply chain difficulties continue.
The central bank predicts the Colombian economy will grow 9.8% this year, moderating to 4.7% expansion in 2022.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.