What‘s priced in: BANREP likely to hike this week

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What‘s priced in: BANREP likely to hike this week

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What’s priced in

BANREP likely to hike this week

In Colombia, the central bank meets on June 30. The market is pricing a 50bp hike for 28 June 2026

the meeting. Our economist, Alexander Müller, forecasts the Central Bank of Colombia GEM FI Strategy

(BANREP) to hike 100bp on June 30. The central bank will want to send a strong signal Global

that they are defending the inflation mandate. El Niño poses the risk of a supply shock in

electricity and food, pushing inflation up. The shock may become more visible in Claudio Irigoyen Global Economist

September. For 2027, we have four 25bp rate cuts (March, June, September, December) BofAS

with the rate ending at 11.25%. claudio.irigoyen@bofa.com

David Hauner, CFA >>

In Mexico, the central bank BANXICO kept the policy rate at 6.50% on June 25. The GlobalMLI (UK)EM FI/FX Strategist

decision was unanimous. The statement shows a central bank more concerned with low david.hauner@bofa.com

growth than with high inflation. Our economist, Carlos Capistran, forecasts BANXICO on Claudio Piron

hold at 6.50% for the rest of the year, even if the US Fed hikes, on growth concerns. The EmergingMerrill LynchAsia(Singapore)FI/FX Strategist

market is pricing 22bp of cumulative hikes for the rest of the year. claudio.piron@bofa.com

Pedro Diaz

Caribbean Economist

BofAS

pdiaz2@bofa.com

Chart 1: 12-month priced-in policy rate change vs BofA forecasts

Our forecasts are more dovish than market expectations GEMs FI Strategy & Economics BofAS

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125 98 125

75 56 75

25 23 15 25 7 7 5 5 25

-25 -7 -11 -25

-75 -75

Hikes Cuts BofA -79

-125 -125

-127

-175 -175

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