Colombia Central Bank To Keep Rate Stable, Won't Cut Until December

• Colombia's central bank board will keep its interest rate stable at its meeting next week, a Reuters poll forecast on Monday, amid uncertainty over the impact of the El Nino weather phenomena on inflation and gasoline price pressures.
• Eighteen of 25 analysts surveyed said the bank would keep the benchmark interest rate at 13.25%, which is its highest point in 24 years and where it has remained since May.
• Two analysts predicted a 25 basis point and five others projected a 50-point cut at the Oct. 31 meeting. A majority of analysts in last month's survey had projected the first rate cut would take place in October. Whatever the decision, it will be by majority, like the vote seen in September, analysts said.
• High inflation will limit the possibility of action by the central bank, BBVA said in a note, adding inflationary risks include "a larger-than-anticipated effect of the El Nino phenomena, a stronger shock in energy prices and an important increase in the minimum wage."
• A minority of those polled said economic deceleration coupled with the downward tendency of inflation would give the board enough space to begin its cutting cycle now. Colombia's inflation rate eased to 10.99% in September from 11.3% in August, though it remains more than three times the target rate of 3%.
• On the other hand, Finance Minister Ricardo Bonilla - who represents the government on the board - told Reuters this month he is eyeing two rate cuts, in October and December.

(Source: Reuters)