Not only is inflation continuing to decline, the The effect of El Nino phenomenon is increase in minimum wage, petrol and dieselAmong other things, that elements Board of Directors of Republic Bank He sees a meeting tomorrow where he can change the rates.
Other arguments to begin with Low ratesDebt collapse or the economy suffering more than observed is on the agenda.
(Slow decline in inflation creates fear of minimum wage).
Analytical Center LRA He said that Monetary Policy Interest Rate (13.25%) Sufficient to consolidate declines in inflation towards the issuer’s target range. “This, while maintaining macroeconomic stability in an environment enabling a soft landing”.
Laura Clavijo, director of economic, sector and market research at Pancolumbia, says that although there is a consensus that there will be stability, the result needs to be analyzed. Low rates”It will take a little longer as August inflation showed more stability and upward pressures will remain with an El Nino event at the end of the year or early 2024 and minimal negotiation.”.
Although it is true, says the researcher Brazil, Chile and Peru They have started to cut rates, they control inflation better than Colombia and have warned of a slower pace of rate cuts, with current monetary policy in a more accommodative state.
(Present rate of interest on consumer and ordinary credit will be 26.53% EA).
Sergio Olarte, Chief Economist at Scotiabank ColpatriaA more significant slowdown in the economy, especially household consumption, has led the Republic to think the Bank may start cutting rates, but inflation is falling more slowly, more than three times the inflation target. The issuer will have to wait a little longer to consolidate the fall in inflation, especially before negotiating possible increases in the minimum wage and diesel prices..
“We believe the issuer is going to wait until inflation declines in a consolidated way to start cutting interest rates, which for us could be between December or January next year.“, said.
For its part, David Perez is professor of finance at the University of the AndesInflation remained high and sustained, meaning it fell less than expected and the real intervention rate (intervention rate minus inflation) was not high enough to suggest the monetary stance was too contractionary.
(Is Colombia in danger of facing stagnation?).
He assured that the Republic Bank was doing its job and did not know why Finance Minister believes it is better to reduce the voices of unions because “He, being the chairman of the board of directors of Banco de la Repubblica, exerts pressure that can have negative consequences.”.
to Arnoldo Casas, Director of Asset Management Investments at CreditCorp CapitalThe issue of cuts was linked to union pressure, the debt situation and banks’ balance sheets, but nothing compelling from the inflation side, and he felt that cutting rates could already backfire on the dollar and leave the country exposed. Impact from international macroeconomics.
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