Home Stock Market Colombia central financial institution to hit the fuel, increase charge 150 foundation factors: Reuters ballot By Reuters

Colombia central financial institution to hit the fuel, increase charge 150 foundation factors: Reuters ballot By Reuters

Colombia central financial institution to hit the fuel, increase charge 150 foundation factors: Reuters ballot By Reuters

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© Reuters. FILE PHOTO: Normal view of Colombia’s central financial institution in Bogota, Colombia October 9, 2019. REUTERS/Luisa Gonzalez

By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s central financial institution will increase its benchmark rate of interest by the best uptick in additional than 20 years when it meets subsequent week, analysts mentioned in a Reuters ballot on Friday, because it seeks to regulate spiking inflation.

13 of 16 analysts estimated the financial institution board will increase borrowing prices by 150 foundation factors to five.50%, whereas two projected a rise of 125 foundation factors and one predicted a 100 level enhance.

If the seven policymakers observe the bulk projection, the uptick could be the most important since November 1999.

The market expects client value will increase to proceed to climb, above even the 8.01% 12-month determine reached in February, removed from the financial institution’s long-term goal charge of three%.

“On this context the central financial institution must take choices…and proceed to speed up the speed,” mentioned Citibank economist Esteban Tamayo. “I anticipate in subsequent week’s assembly it is going to be raised 150 foundation factors and in April there shall be a rise of the identical magnitude.”

February inflation information was a shock for practically everybody, financial institution board member Roberto Steiner mentioned at first of this month.

In accordance with the median prediction within the survey, analysts anticipate the board to take the speed to 7.50% earlier than the tip of the 12 months, properly above the 5.75% estimated within the earlier ballot.

“Current strain of world and native inflation oblige the central financial institution to point out extra proactive administration amid an inflation that won’t cease rising,” mentioned Wilson Tovar, head economist at Acciones y Valores.

“Although progress should be protected, the hurt of appearing timidly isn’t solely extra harmful for the financial system, but additionally places in peril the financial institution’s credibility if it continues with a measured tempo,” Tovar mentioned.

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