Colombia: end of tightening cycle approaching

The minutes to the Colombian central bank meeting last Friday revealed that worries about the growth outlook will bring the tightening cycle to a close soon. We expect the central bank to deliver one final 50bp hike, to 13.25%, at the next meeting in March. But with growth likely to hold up a bit better than the central bank’s (very downbeat) expectations and inflationary pressures set to remain strong, we think monetary policy will remain very tighter for longer than most expect over this year and next.