Colombia to Follow Rate Trend

Colombia’s central bank is expected to keep its monetary policy rate unchanged at 4.0% today, following the trend in most other LatAm countries. “After the surprise [50bp] cut last month, we expect Colombia’s Banrep to also hold rates at 4.0%,” says Bank of America Merrill Lynch. “COP strength is still a focus, and indeed direct FX intervention is under study, but further cuts may not be the solution,” it adds. Morgan Stanley agrees, saying it sees higher risk of FX intervention, rather than easing to take pressure off the currency.