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By Nelson Bocanegra
BOGOTA (Reuters) – Colombia’s central financial institution board is anticipated to boost the benchmark rate of interest by 50 foundation factors to three% this week and proceed will increase all through 2022 as policymakers attempt to tamp down above-target inflation, a Reuters survey confirmed on Monday.
Twenty-one analysts stated in a survey a half-point enhance on the board’s final assembly of the 12 months will seemingly be backed by a majority of the seven policymakers although some will assist a extra gradual 25 foundation level rise.
If the half-point rise goes forward, the rate of interest can have been raised 125 foundation factors since September, when the board started a cycle of will increase.
“Bearing in mind that complete inflation is at 5.26% and there can be extra inflationary pressures within the coming months, we count on the central financial institution to extend the speed by 50 foundation factors,” brokerage Alianza Valores stated in a report.
“However, there’s a risk the rise might be 75 foundation factors, with a divided vote,” it added.
Shopper costs elevated 5.26% within the 12 months by way of November, nicely above each expectations and the financial institution’s long-term goal price of three%.
The board will most likely again one other price uptick in January, the analysts stated, and the speed will finish subsequent 12 months at 5%, in response to median estimates within the survey, as inflationary pressures and world provide chain difficulties proceed.
The central financial institution predicts the Colombian economic system will develop 9.8% this 12 months, moderating to 4.7% enlargement in 2022.
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