Colombia Seen Holding Rates

Colombia’s Central Bank is largely expected to hold its reference rate at 5.25% at today’s meeting, though some conversation have revolved around whether it could consider cuts this time. Goldman Sachs sees a probability of less than 20% of what it calls a “25bp rate cut surprise.” It does, though, reference a divided MPC regarding the need for monetary easing. “The balance of views within the MPC is gradually shifting into the dovish camp as there is now a group of 2-3 directors that is concerned with the deteriorating external backdrop (which is expected to remain weak for a prolonged period of time) and emerging evidence of domestic demand slowdown,” it says in a report, adding that the minority group voted for a 25bp rate change in June. Citi says its survey shows an expectation of a 50bp drop in the reference rate by the end of the year.