Colombia | BanRep cut its policy rate by 25bp to 13.0%. With a split vote

Summary

The Bank of the Republic took the decision to lower its interest rate by 25bp, with a split vote (5 to 2), the decision is explained by the reduction in inflation, which brought the annual figure for November to 10.15% and activity indicators show that the economy continues to decelerate.

Key points

• Key points:
• The split vote shows a significant change (of 3 members) from the last two votes in which the majority supported rate stability (balance 5 to 2 in both cases).
• At the global level, inflation continues to decelerate although it is still elevated, which has helped to lower the forecasts for the behavior of policy interest rates to a lower path than previously expected.
• The Board of Directors highlights the performance of the ISE for the month of October, which contracted by 0.4% in its annual variation, also highlighting the moderation of the current account deficit in 2023.
• Within the framework of the current negotiations on the increase of the minimum wage, the Board calls for the adjustment to be moderate and not too far from the inflation caused.

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