Colombia | Banrep raised its monetary policy interest rate by 100 bps

At its April meeting, Banco de la República increased the monetary policy rate by 100 bps, bringing it to 6.0%. The vote was split, with 4 members in favor of a 100 bp increase and 3 members in favor of a 150 bp increase.

Key points

• Key points:
• With this increase, the Bank maintains the pace of rate tightening reported in January and March. The decision was split, with 4 members favoring a 100 bp increase and the remaining 3 advocating a 150 bp increase.
• Regarding inflation, the statement emphasized the March result of 8.53% and the core result of 4.51% with a clear upward bias associated with risks from the conflict in Ukraine on commodity prices.
• On activity, the Bank makes a small comment in the statement, highlighting that the technical team revised upwards the growth expectation to 5.0% from the previous 4.7%. They maintain the forecast for 2023 at 2.9%.
• On the external front it only highlights the impact of the conflict in Ukraine with a risk of additional inflation pressures and in a single line highlights that the outlook for interest rate hikes in the US has been raised.
• We believe that the Bank will continue to raise its interest rates, possibly in steps of 100bp, in the next meetings (June and July) to bring the rate to 8.0%.

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