Colombia | Banco de la Republica reduced its policy rate by 50 bp to 10.25%

Summary

The Board of Banrep reduced its monetary policy rate by 50 bps, bringing it to 10.25%. This decision was split, with 4 members favoring the 50 bp reduction and three members voting for a larger reduction of 75 bp.

Key points

• Key points:
• The statement of the Board of Banrep highlights that inflation in August stood at 6.1% and that it was below market expectations.
• Activity in the second quarter showed a higher result than anticipated, especially on account of private consumption, although it also highlighted that investment showed some recovery in this figure.
• On the external front, they highlighted the decision of the US Federal Reserve to lower its policy rate by 50 bp and the expectations of additional cuts in the coming months.
• During the press conference, the Governor highlighted that the full Board supports the rate cut and that differences remain on the magnitude required.
• Regarding fiscal issues, the Minister highlighted the need for a program to recover the economy.

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