Published on Friday, February 9, 2024

Colombia | BanRep lowers rates through the staris, market rates take the lift

When the central bank initiates a rate reduction cycle, all eyes are focused on commercial banks and how market rates adjust. So far, market rates have fallen significantly more than those of the BanRep.

Key points

  • Key points:
  • BanRep lowers rates, but market rates fall sooner and faster.
  • In addition to the BanRep cycle, factors such as the country risk and regulatory changes have influenced market rates, both in the hiking and reducing cycles
  • Declining inflation may allow BanRep to accelerate rate cuts
  • The anticipated and more rapid reduction in market rates defies historical experience, in which market rates follow the movement of the BanRep.

Documents to download



New comment

Be the first to add a comment.

Load more

You may also be interested in