[ad_1]
The bet on the monetary policy of the Banco de la República for the rest of the year seems to be played. The financial market does not expect further changes in 2018 and the decision this month was to keep the interest rate at 4.25%. However, as the director of the transmitter, Juan José Echavarría, says, it is now a question of examining the new information available.
The accounts of the Council of the Bank of the Republic contain several problems. The attention will be focused on two almost certain facts. The first is the increase of the minimum wage which, as recognized Minister of Finance, Alberto Carrasquilla, "is an issue that the monetary authority must take into account" .
The Minister pointed out the badociated risks. wage increase, because "raising it little has an undesirable effect on purchasing power and too much growth has adverse effects on the labor market and inflation". Precisely, the expectation of change in the CPI remains at 3.3% for 2018 and 2019 .
Although the CPI of 2019 is close to the goal, the impact will only be known. the increase, as indicated by Sergio Olarte, Director of Research at BTG Pactual. "A high wage increase would trigger the price escalation mechanisms and many of the procedures and regulated elements would increase in the same proportion and affect inflation."
In addition, another risk that the issuer considers is the impact on the change in the price index for food consumption that would result in the eventual El Niño phenomenon, which has a chance to materialize 70%, according to the NOAA.
However, badysts agree that it will be a momentary effect, which will be controlled due to the normalization of the food supply. Munir Jalil, head of research at Citibank, has estimated that "throughout the entire year does not have much of an inflationary impact, seen only in the period, but then diluted . "
Another problem in the bridge of the transmitter, as pointed out the director Echavarría, and this always worries the experts, is that of the speed of the economic recovery . While growth forecasts for 2018 have been reaffirmed at 2.7% and 3.5% for 2019, the debate is about growth potential, which has been reformulated by several badysts.
On the devaluation of the peso Echavarría observed that the phenomenon related to processes in the region, while it was necessary to pay attention to "the effect of the devaluation on the negotiable elements, there is a lot to observe. " However, he said that, contrary to other times, when monetary policy reacted to the exchange rate, this would no longer be the case at the moment.
[ad_2]
Source link
