Colombia Finance Chief Sees Swift Key Rate Cuts to 8% by 2024

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(Bloomberg) -- Colombia’s central bank has room to lower interest rates by over five percentage points from the current level to 8% in 2024 as inflation...

-- Colombia’s central bank has room to lower interest rates by over five percentage points from the current level to 8% in 2024 as inflation continues to slow, Finance Minister Ricardo Bonilla said in an interview.Wider War in Middle East Could Tip the World Economy Into Recession

Colombia’s inflation will not ease as fast as in Chile or Brazil, as the Andean nation still has to increase fuel prices to close a gap caused by subsidies provided after the pandemic. Specifically, Bonilla said the government may have to increase gasoline costs for the next three or four months as oil jumps globally and will then begin gradual increases in diesel through 2025.

Bonilla said the government is showing investors fiscal responsibility by lowering debt levels and increasing fuel prices to close the budget gap, which should support the currency. OTTAWA -Bank of Canada Governor Tiff Macklem on Friday, speaking ahead of an interest rate decision on Oct. 25, said a recent surge in long-term bond yields is not a substitute for monetary policy and the economy is not heading for a deep recession. The bank would "take into account" the tighter financial conditions due to higher long-term bond yields before its Oct. 25 policy announcement, Macklem told reporters in a call from Marrakech, Morocco, where he was attending an IMF meeting.

 

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