Colombia Seen Tightening Rate

Market consensus points to Colombia’s central bank tightening its rate by 25bp to 3.50% today. However, Nomura is forecasting the central bank will keep the rate unchanged at 3.25%. It cites a 1.9% appreciation in the COP after having peaked at 1,915 per USD on March 1 and decreased inflation expectations. It expects the rate to hit 4.00% by the end of 2011. Celfin says there is a chance the central bank will leave rates untouched given lower inflation expectations.