Recession, Below-Target Inflation Will Drive The Colombian Central Bank's Dovish Stance

• Colombia’s Banco de la República (BanRep) will maintain its dovish monetary policy stance in the coming quarters in an effort to promote economic activity during the Covid-19 pandemic.
• In addition to weak price pressures that keep inflation at multi-year lows, a dovish US Federal Reserve will support BanRep's sustained monetary stimulus measures.
• Fitch Solutions forecasts that BanRep will leave its policy interest rate at 2.00% through the end-2020 and into 2021. That said, Fitch revised its 2020 and 2021 average inflation forecasts to 2.6% and 2.5% y-o-y, from 2.9% and 3.0% previously, as subdued domestic demand persists in the short-to-medium term

(Source: Fitch Solutions)