Colombia’s Central Bank Board is set to meet for its final 2024 session, where a 50 basis point cut in the benchmark interest rate to 9.25% is expected. This cut, representing the seventh consecutive reduction, arises amidst fiscal struggles and inflation challenges faced by the country.
The Board of Colombia’s Central Bank is anticipated to convene for its final meeting of the year on Friday, during which analysts predict a vote to decrease the benchmark interest rate by 50 basis points. This reduction would lower the rate to 9.25% and mark the seventh consecutive such cut. Amid global economic uncertainties and domestic fiscal challenges, all 25 analysts surveyed in a Reuters poll support the expected rate decrease.
This meeting occurs against a backdrop of significant fiscal challenges facing the Colombian government under President Gustavo Petro. The government has struggled to adhere to fiscal rules aimed at preventing public finance deterioration and recently encountered legislative setbacks, including the rejection of a proposed fiscal reform totaling $2.7 billion. Moreover, the Autonomous Fiscal Rule Committee has recommended substantial spending cuts in the upcoming years, emphasizing the precarious nature of Colombia’s fiscal landscape.
In summary, the anticipated 50 basis-point cut in the benchmark interest rate reflects a strategic response to ongoing economic uncertainties and fiscal challenges in Colombia. As the Central Bank aims to align inflation with its target, the decision will be critical in shaping the economic outlook for the nation in 2025 and beyond.
Original Source: www.brecorder.com
