June 22, 2022
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There is (now) a wide consensus that Banxico will match Fed’s expected hikes through December, taking the policy rate to 9.50% by year-end
The Board of the Central Bank decided to increase the monetary policy rate from 5.00% to 5.50% in June. The Bank continues the normalization of monetary policy in a context of lesser external headwinds and pessimistic expectations.
The Board of the Central Bank decided to increase the monetary policy rate from 4.50% to 5.00% in May. The Bank continued the normalization of monetary policy but pointed to lower external headwinds and pessimism in expectations.
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.
Banco de la República increased its intervention rate by 100 bp at its last meeting. On the one hand, analysts expected an increase of 150 bp, while businessmen expected more moderate adjustments. Going forward, further rate increases are expected to counteract the high inflation levels.
Taking into account a less favorable external scenario, we have revised downwards the growth forecasts for 2022 and 2023, from 2.3% to 2.0% in the first case and from 3.0% to 2.8% in the second.
The Colombian economy will continue to show resilience in a context of greater global uncertainty, more contractionary monetary policies and strong upward pressures on inflation. We expect the economy to grow 4.5% in 2022 and 2.5% in 2023, driven by domestic demand and exports.
March 11, 2022
Peru | BCRP expects inflation to remain above target for longer and hikes policy rate
The Board of the Central Bank decided to increase the monetary policy rate from 3.50% to 4.00% in March. The Bank now expects inflation to return to the target range in the first half of next year.