In its last meeting of the year, the board of directors of the Banco de la República reduced its intervention rate by 25 basis points, thus going from 9.75% to 9.50%. The decision surprised the market, since the cut was projected to be around 50 basis points.
(Read more: Banco de la República reduced interest rates to 9.50% in its last meeting of 2024)
According to the president of the Colombian American Chamber (AmCham Colombia), María Claudia Lacouture, this withdrawal by the Issuer constitutes a call to “join efforts” for improve the economic climate of the country.
“The smaller decrease in interest rates by 25 basis points to reach 9.5%, by the board of the Bank of the Republic, definitely calls for joining efforts, based on the messages and decisions of the National Government to build trust”, explained the union leader.
Likewise, he highlighted that it is key to keep in mind that cuts in interest rates are not the only instrument to give way to the reactivation of the economybut to this action we must add austerity and spending efficiency. This is also with a view to complying with the Fiscal Rule.
(Read more: How much has the minimum wage risen in the last 10 years in Colombia?)
(See: Comptroller’s Office warns that the new 2025 Budget would leave it ‘in a bad position’)
“Although further reductions in the interest rate are important, it is not the only variable that must be implemented to overcome the growth challenge. Work must be done on economic reactivation, austerity and spending efficiency,” Indian.
Along these lines, Lacouture highlighted that all these actions will not only contribute to improving the economic environment, but will also allow the private sector can be projected in the medium and long term with the aim of generating sustainable growth for the country, as well as an improvement in the purchasing power of Colombians.
(Read more: The keys to the latest rate decision made by Banrep in 2024)
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