19 Feb 2015
Colombia: Expect BanRep to remain on hold throughout 2015 – TDS
FXStreet (Barcelona) - Blue Macellari, Senior LatAm Strategist at TD Securities, expects slowing growth and slightly above target inflation to lead The Central Bank of Colombia to keep the policy rates on hold throughout 2015.
Key Quotes
“We, and the market, expect The Central Bank of Colombia (BanRep) to keep the policy rate unchanged at 4.5% at Friday’s meeting.”
“While headline inflation finished 2014 at 3.66%, above the Bank’s 3% target, and January inflation surprised on the upside coming in at 3.82% y/y.”
“However, the prospects of slowing growth, largely on the back of lower oil prices and oil production, have led BanRep to adopt a neutral tone thus far.”
“We expect growth to slow substantially this year, forecasting 2015 growth at 3.5%, down from 2014’s estimated 4.7% growth. At its last meeting, BanRep lowered 2015 growth estimates to between 2-4%, with 3.6% as the likely growth rate, revised down from the 3-5.3% range with 4.3% as the most likely outcome.”
“Oil prices and production constraints will be a significant drag on growth, as will lower domestic demand."
“With this combination of slowing growth, coupled with inflation slightly above target, we continue to expect BanRep to leave rates unchanged at 4.5% throughout 2015.”
“We expect to see COP depreciation continue, and forecast USDCOP at 2650 by year-end.”
Key Quotes
“We, and the market, expect The Central Bank of Colombia (BanRep) to keep the policy rate unchanged at 4.5% at Friday’s meeting.”
“While headline inflation finished 2014 at 3.66%, above the Bank’s 3% target, and January inflation surprised on the upside coming in at 3.82% y/y.”
“However, the prospects of slowing growth, largely on the back of lower oil prices and oil production, have led BanRep to adopt a neutral tone thus far.”
“We expect growth to slow substantially this year, forecasting 2015 growth at 3.5%, down from 2014’s estimated 4.7% growth. At its last meeting, BanRep lowered 2015 growth estimates to between 2-4%, with 3.6% as the likely growth rate, revised down from the 3-5.3% range with 4.3% as the most likely outcome.”
“Oil prices and production constraints will be a significant drag on growth, as will lower domestic demand."
“With this combination of slowing growth, coupled with inflation slightly above target, we continue to expect BanRep to leave rates unchanged at 4.5% throughout 2015.”
“We expect to see COP depreciation continue, and forecast USDCOP at 2650 by year-end.”