Colombia’s central bank (BanRep) defied expectations for another rate hike this week, opting to keep rates unchanged instead, which may raise concerns that the Board is taking President Petro’s criticism of tighter policy on board. But we suspect the move is aimed at avoiding becoming a political football ahead of the election later this month, and another rate hike is possible at the June meeting. Elsewhere, March trade data showed that Mexico’s exports boomed, with AI-related products probably providing a boost. But with other sectors weak – as shown by the fall in GDP in Q1 – we think Banxico will opt for a 25bp rate cut, to 6.50% on Thursday.
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