12 May 2015
Colombia does not rule out further easing – Scotiabank
FXStreet (Edinburgh) - Eduardo Suarez, Chief FX Strategist at Scotiabank, believes the Colombian central bank could loosen its monetary policy in the next months.
Key Quotes
“FinMin Cardenas said he expects that COP’s rally will help contain inflationary pressures, alongside helping shrink the country’s current account deficit”.
“According to the FinMin, this changes should open the way for the central bank to be able to ease monetary policy if necessary later in the year”.
“Cardenas reiterated the government’s interest in increasing foreign participation in the domestic bond market, which in our view should improve the liquidity of the domestic bond market as foreign involvement rises (although the progress could be “bumpy”, as it has been in Mexico)”.
“Cardenas said the idea of making local currency bonds Euro‐clearable could be attractive, and is something that the government could consider, in order to improve their liquidity”.
“In our view, the process followed by Mexico’s FinMin for increasing the liquidity of domestic currency debt could serve as a benchmark for other countries in the region, including moving to make FX deliverable (which could become more attractive for the region’s countries now that concerns over excessive capital flows have subsided), and making bonds easier to access by foreigners”.
Key Quotes
“FinMin Cardenas said he expects that COP’s rally will help contain inflationary pressures, alongside helping shrink the country’s current account deficit”.
“According to the FinMin, this changes should open the way for the central bank to be able to ease monetary policy if necessary later in the year”.
“Cardenas reiterated the government’s interest in increasing foreign participation in the domestic bond market, which in our view should improve the liquidity of the domestic bond market as foreign involvement rises (although the progress could be “bumpy”, as it has been in Mexico)”.
“Cardenas said the idea of making local currency bonds Euro‐clearable could be attractive, and is something that the government could consider, in order to improve their liquidity”.
“In our view, the process followed by Mexico’s FinMin for increasing the liquidity of domestic currency debt could serve as a benchmark for other countries in the region, including moving to make FX deliverable (which could become more attractive for the region’s countries now that concerns over excessive capital flows have subsided), and making bonds easier to access by foreigners”.