Colombia Seen Slicing Rates

Colombia was poised to cut rates late Thursday following a monetary policy meeting. JPMorgan, Merrill Lynch and Morgan Stanley expect BanRep to chop the monetary policy rate by 50bp to 8.50%. However, the central bank could make a larger cut of 100bp, as a minority of BanRep’s board had suggested such a cut in January. Morgan Stanley says that there is a slight possibility that BanRep might slow the pace of loosening if the COP continues weakening, but says it is unlikely as there are no signs of pass-through yet. The COP’s has devalued since the beginning of the year, trading at 2,510/USD on February 23, from 2,244 on January 1, according to BanRep data.