Colombia central bank to cut rate to 11.25%
By Nelson Bocanegra
BOGOTA, June 21 (Reuters) -Colombia's central bank board is expected to cut 50 basis points from its benchmark interest rate for the third consecutive time during its meeting at the end of June, a Reuters poll showed on Friday, on a slower fall in inflation.
All 25 analysts surveyed said the seven-member board will cut borrowing costs to 11.25%, which would be their lowest since October 2022.
The decision will be by majority, most of the analysts said. Finance Minister Ricardo Bonilla, who represents the government on the board has said publicly he wants a rate cut of 100 basis points to boost the economy.
If the predictions of those surveyed are met, the trim would be the fifth cut since the board began reducing the rate in December. So far it has cut 200 basis points from the rate.
"It's probable that the rhythm of cuts by the central bank will continue to be gradual amid a difficult national fiscal scenario," said Carolina Monzon, head of Colombia economic studies at Brazilian bank Itau. "At the same time, inflation expectations still have not opened the door to accelerating the cuts cycle for June."
Inflation was 7.16% in the 12 months through May.
"In international terms a Federal Reserve that delays rate cuts until the fourth quarter of 2024 or even 2025 would favor the (Colombian) central bank keeping its cuts at 50 basis points," said Natalia Ossa, an analyst at Banco Agrario.
Analysts raised their interest rate outlook for the end of this year to 8.5%, up from 8.25% in the previous survey.
Interest rate predictions for year-end 2025 were 5.75%, compared with 5.5% in a previous poll.
Reporting by Nelson Bocanegra
Writing by Julia Symmes Cobb
Editing by Louise Heavens
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