Colombia’s Duque Urges Cautious Approach on Further Rate Hikes
Colombia’s Duque Urges Cautious Approach on Further Rate Hikes
(Bloomberg) -- Colombian President Ivan Duque urged a cautious approach to further tightening after the central bank accelerated the pace of interest-rate increases last month.
In an interview in Dubai, the 45-year-old said he thinks the monetary authority is being “very responsible,” while cautioning about the need for balance to support the nation’s economic rebound.
“I don’t want to mess with the independence of the central bank but if you ask me, I think the intervention that has already been undertaken, we have to wait a little to see how inflation reacts,” Duque said on the sidelines of Expo 2020.
Colombia, Latin America’s third-most populous nation, has faced market turbulence this year. The peso has fallen 11%, the fourth-worst among major global currencies, while Fitch Ratings and S&P Global Ratings both downgraded the country to junk status earlier this year.
Duque, a U.S.-educated lawyer, brushed aside those actions as “premature,” saying “the market really sees Colombia as an investment-grade country.” He said the peso hasn’t necessarily weakened too much, expecting it to trade mostly between 3,700 and 3,800 per dollar in the coming months.
The nation’s Finance Ministry just upgraded its economic growth forecast to 8.5% for this year, from around 6% earlier, according to the president. He said the rally in oil, the country’s top export, is also supporting the rebound.
Colombia has accomplished its financing requirements for 2021 and will consider tapping international capital markets again in the coming months to begin pre-financing for next year, Duque said.
“Definitely we’ll try to do that because it’s responsible,” he said.
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