BanRep paused rates at 9.50%, in a split decision. This time five directors voted for the pause, one for 25bp (likely Acosta) and one for 50bp (likely FinMin Guevara). The justification was based on three risks: i) PPI; ii) minimum wage hike; and iii) increase in expectations across the board. In the press conference, BanRep Governor Villar highlighted tariff and trade uncertainty as a key factor in the decision to pause today and the central bank’s cautious approach. The rhetoric was largely in line with the main cautionary points made by Villar at our London conference (see link). BanRep also noted it is not considering another reserve accumulation programme.
For more, including market takeaways, please see full note.