Colombia | Banco de la República kept its official interest rate stable at 13.25%

At the July meeting, the BanRep decided to leave monetary policy unchanged at 13.25%, confirming the end of the bullish cycle. They highlighted the reduction in inflation, although it continues at elevated levels, and a greater than expected slowdown in activity in the second quarter.

Key points

• Key points:
• In line with expectations, the stability decision, with a unanimous vote, reaffirms our view of the end about bullish cycle with the April increase this year.
• It should be noted that inflation (12.1%) continues to moderate, especially compared to the highs of the year and to what was observed at the end of 2022 (13.1%). However, a cautious discourse is still perceived in the face of the observed moderation of inflation.
• The statement highlights that the ISE results (for the months of April and May), as well the industry and commerce surveys, suggest that the economic deceleration would have continued and that it would have been somewhat greater than the one anticipated by the technical team of Banco de la República. However, they also highlight that the labor market continues to perform well.
• It is also noted that there has been a significant slowdown in credit and an increase in its relative deterioration. In spite of this, they highlight that the conditions of credit institutions in terms of capital and liquidity continue to be solid in accordance with international standards.

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