Although inflation slowed in May The rate of decline that it had been showing for 13 months, there is a consensus that this indicator will continue its decline at a slower rate, Therefore, a new cut in the monetary policy rate is expected at today’s meeting of the board of directors of the Bank of the Republic.
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And in that sense, the surveys of the Bank of the Republic, Anif and Fedesarrollo, as well as the position of universities, research centers and analysts show that the reduction would be 50 basis points, so that the Issuer’s rate will go from 11.75%, as set on April 30, to 11.25%.
In the June survey by Fedesarrollo 75% of the analysts surveyed said that the rate will drop by 50 basis points (bp) to 11.25% and they expect the intervention rate to be 10% by September, respectively.
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They also anticipate that the intervention rate will be at 8.50% in December 2024, remaining stable compared to the 8.50% expected the previous month.
For its part, the Anif Intervention Rate Survey of the Bank of the Republic (formerly EARC) for June reflects the consensus among analysts regarding the need to extend the relaxation of the monetary policy of the Bank of the Republic.
Inflation
Analysts expect that, at its fourth meeting of the year, the Issuer will continue with the downward trend in rates that began with the 25 bp cut last December.
The survey involved three research centers, five local banks, three foreign banks, four stockbrokers,
Contrary to what happened during 2023no entity consulted considers the possibility of increasing the rate.
Eafit University believes that the decrease It will be 25 bp but it should be 50 bp and Alliance Bernstein estimates that it will drop 50 bp but it should be 100 bp or more.
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For its part, the Anif survey says that the 85% of those consulted believe that there will be two members in disagreement with the majority decision, while 10% believe that there will be three and 5% that there will be only one member.
It was asked who they consider would be the members of the Board who would not agree with the majority decision and The first two places went to Ricardo Bonilla, Minister of Finance, and Olga Lucía Acosta.
Inflation
These responses are related to the persistent statements by the Government regarding the need for a more pronounced easing of monetary policy.
Until now, Government interventions in favour of a reduction The faster rate hikes in monetary policy were associated with inflation results and poor economic performance.
However, in May inflation stagnated at the same levels recorded in April (7.16% annually), showing a slowdown in the convergence towards the goal of the Bank of the Republic.
Anyway, Anif said that “It should be noted that the variation in April has an important calendar component. Thus, we will have to wait for new available data to verify whether economic activity consolidates its recovery.”
HOLMAN RODRIGUEZ MARTINEZ
Portfolio Journalist
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