Colombia | Banco de la Republica reduced its policy rate by 50 bp to 9.75%

Summary

The Board of Banrep reduced its monetary policy rate by 50 bps, bringing it to 9.75%. This decision was split, with 4 members in favor of the 50 bp reduction and three members voting for a larger reduction of 75 bp. The balance reached at the last meeting remain unchanged.

Key points

• Key points:
• The statement issued by Banrep's Board highlights the decrease in inflation in September, reaching 5.8%, although it emphasized that inflation without food or administered prices remained stable in the last month.
• Activity continues to show a better performance than that observed at the end of 2023 and in the first part of the year, leading the Central Bank's technical team to increase its growth forecast for 2024 to 1.9% from 1.8% previously (0.9% at the beginning of the year) and in 2025 to 2.9% compared to 2.7% previously.
• The press release highlights the recent behavior of the financial markets, recognizing that greater volatility is observed in international and local markets.
• Fiscal issues were at the center of the discussion at the press conference. It was emphasized that the transfer bill, being a legislative act, does not require the government's fiscal endorsement nor does it require the government's veto option.
• At the press conference it was highlighted that the full Board supports the rate cut and that differences remain on the required magnitude.

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