Colombia Seen Sticking on Rates

Morgan Stanley, in line with market consensus, sees Colombia’s monetary policy rate remaining at 4.50% as the central board meets today, with year-end inflation at 3.90%, down from 7.7% at the end of 2008. Annual inflation as of August was 3.13%, according to the central bank. The shop forecasts Colombia’s central bank will hike to 5.25% by the end of 2010. Goldman Sachs also believes it will remain at 4.50% for a while, but says that weaker than expected activity prints could increase the probability that the divided central bank’s monetary policy committee could decide to increase the monetary stimulus to the economy.