The Day at a Glance | December 26 2022

*President of the Central Bank of Japan discarded the possibility of abandoning its accommodative monetary stance in the short-term.

*Central Bank of Chile could maintain its reference rate unchanged at 11.25% in its next meeting, scheduled to take place in January.

*Colombia`s Central Bank President, Leonardo Villar, stated that interest rate increases could finally be approaching their end.

*Isabel Schnabel, member of the European Central Bank`s executive board, commented on the need to move interest rates towards “restrictive territory” in order to push inflation towards the target level. 

*A Ukrainian drone attacked a bombing-base in Russia. The Russian Minister of Defense announced the death of three air force members, although no aircraft was damaged.

Economic environment

Due to there being a lack of economic indicators at the start of the week, markets are focused on monetary policies. In Japan, the Central Bank`s President discarded the possibility of the institution approaching the end of an accommodative stance. Markets have taken into account a change in the central bank`s steering once Kouda, the bank`s head, leaves his position in April, partially due to comments made by Prime Minister Fumio Kishida in which he pointed out the possibility of revising the strategy to fight deflation after a new President is chosen. In Chile, a survey showed that reference rate expectations forecast the rate to remain at 11.25% in the country`s first meeting of 2023. However, the rate is expected to set at 10.75% in April. Lastly, in Colombia, Leonardo Villar pointed out that the country`s increasing rates cycle could be approaching its end. Currently, the monetary policy rate is set at 12.0% after 8 increases – of 900 bp total – were implemented throughout 2022.