While our base case is that Colombia's central bank will leave its policy rate unchanged at its meeting later today, the further deterioration in the fiscal picture and the prospects of a large minimum wage hike mean that there's a growing chance that the central bank will hike its policy rate. Otherwise, the minutes to Brazil's December monetary policy meeting suggest that an interest rate cut in January is still finely balanced. Finally, the victory for right-wing candidate José Antonio Kast in Chile's presidential run-off last Sunday and his pledge to tighten fiscal policy means that Chile's public finances should remain healthy by regional standards.
Note: This will be the last Latin America Economics Weekly for 2025. The next Weekly will be sent on Friday 9th January 2026.
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