MNI Colombia CB Review - Jun 25: On Hold, Cautious Cuts Ahead

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Executive Summary

• The Colombian central bank left its overnight lending rate unchanged at 9.25% at its June meeting, in line with most analyst expectations. The decision was split 4-3, with two members voting for a 50bp cut and one for a 25bp reduction.
• The decision to pause was driven by an increase in concerns over the fiscal outlook, as well as stronger-than-expected economic growth and elevated inflation expectations.
• Analysts still expect the easing cycle to continue ahead, albeit in a cautious manner, with year-end rate forecasts now sitting mostly in an 8.25-9.00% range.