Colombia’s central bank is expected to cut interest rates by 50 basis points in its last meeting of 2024, addressing global uncertainties and domestic fiscal challenges. Analysts reach consensus on this decision as the benchmark rate is projected to adjust to 9.25%.
The Colombian central bank board is poised for its final meeting of 2024, with analysts anticipating a vote to reduce the benchmark interest rate by 50 basis points. Analysts unanimously predict that this will lead to a decline in the benchmark rate to 9.25%, marking the seventh consecutive reduction of this magnitude. Continued global uncertainty and domestic fiscal challenges underscore this decision, as expressed by various economic experts.
The backdrop to this meeting includes ongoing fiscal difficulties facing President Gustavo Petro’s administration, which has jeopardized adherence to the country’s fiscal guidelines aimed at controlling public spending. A proposed fiscal reform aimed at addressing these issues was recently rejected by Congress, highlighting the urgency of prudent economic governance. Inflation remains above the central bank’s target, exerting additional pressure on monetary policy adjustments.
In summary, the expected interest rate cut by the Colombian central bank reflects both the persistent inflationary environment and the critical fiscal challenges the government faces. The unanimous anticipation of a 50 basis point reduction illustrates a collaborative insight among analysts towards the necessity for continued monetary tightening despite recent improvements in inflation rates.
Original Source: www.brecorder.com
