BanRep raised its monetary policy rate by 100 bp to 11.0%. With a unanimous vote

Summary

At its October meeting, Banco de la República increased its monetary policy rate by 100 basis points, taking it to 11.0%, its highest level since July 2001. The decision was unanimous, seeking to consolidate a positive signal to reassure local financial markets.

Key points

• Key points:
• The decision for the increase was unanimous, which both the Minister and the Governor emphasized at the press conference. For them, this unanimity seeks to generate tranquility and stability in the markets.
• In the statement, the Board of the Central Bank highlighted as the first point the volatility observed in the financial markets, especially in the exchange rate. This relegated to a second place the analysis of inflation and activity, although they continue to be at the center of the Bank’s rate decision.
• The Bank highlighted the acceleration in both total and core inflation in the last month. It highlighted that this upward pressure on inflation is also observed in inflation expectations, which stand at 6.7% for 2023.
• Regarding activity, the press release highlighted the good performance observed in the different activity indicators, ratifying a high growth forecast for 2022. However, it pointed out that for 2023 the expected growth was revised downwards, from 0.7% published a month ago to 0.5% on this occasion.

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