Colombian interest rates still likely to fall next year

The Central Bank of Colombia (BANREP) bucked the regional trend and raised interest rates by 25bps to 4.75% on Friday night. Nonetheless, with inflation now likely to have peaked, we suspect that this marks the last hike in the current cycle. Indeed, given that the euro-zone debt crisis is set to intensify, we still think that interest rates will be cut in 2012.

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