a weighted analysis


This Wednesday the United States Federal Reserve announced a new hike in its interest rates, an expected decision by the US central bank that left the monetary policy indicator between 3 and 3.25 percent, a level it hasn’t since 2008. Has been observed.

Other central banks, such as England, Turkey, Norway or Japan, are expected to join the movement today, making similar decisions to tighten monetary policy positions in their economies to deal with high levels of inflation. Is.

In fact, just two weeks ago the European Central Bank (ECB) also took this decision and increased its indicator by 75 basis points, the highest increase in its history, giving the entity a positive intervention rate once again. .

The analysis of these movements, as is usually the case, is done in two ways.

The first is the impact that large central banks—especially the Fed—can have on the Colombian economy. Effects such as greater weakness in the exchange rate against the dollar, more difficult conditions for capital inflow into the country and shocks in the cost of loans taken abroad can be found in this chapter.

The second part deals with which route the Banco de la Repubblica will take in this regard, and somehow the increase seen in the rest of the world serves as a prelude to the decision that the issuer will announce over the course of the next week. ,

Market analysts share the consensus that the Colombian central bank will raise its interest rates again, taking them from the current nine percent to a level that could possibly exceed double digits. It must be said that two surveys among analysts conducted by Fedesarolo and Banco de la Repubblica indicate that the indicator will reach 10% at this meeting.

Similarly, on the same lines, both reports believe that this will not be the last increase reported by the Banco de la Repubblica and it is expected that the intervention indicator will end 2022 at 11%, according to the data than two percentage points. register today.

This trend invites reflection and has sparked debate about where there should be a level of equilibrium between interest rates that can effectively prevent the high inflation affecting Colombia, but it does not completely derail the locomotive of national development. Doesn’t stop in any way.

This is especially because the effects of the slowdown in the economy are already being felt.

Activity grew at an annualized rate of 6.4 percent in July, according to the latest economic watchdog indicator prepared by DEN, but saw a decrease of 0.3 percent, when reviewing the monthly variation.

Other similar measures that analyze the progress of activities such as industry, trade or business expectations have also begun to show less dynamics for the second half of this year.

There is no doubt in saying that the Banco de la Repubblica should continue to take the necessary action to prevent high prices in the country.

However, signs of a slowdown in the economy, as well as the implications and implications for people and companies that mean higher costs of money in consumption, investment and even indebtedness, force debate and analysis for the next growth rate. gives. And try to find that necessary balance.

Francisco Miranda Hamburger
[email protected]
Twitter: @pachomiranda

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