Central Bank To Remain Accommodative In 2011

BMI View: We now expect Honduran monetary policy makers to take a more dovish stance in 2011, as private sector credit is unlikely return to pre-crisis rates of growth in the foreseeable future. While the central bank has had some success in restoring confidence in domestic credit markets, we now believe it will raise the policy rate by just 50 basis points over the next 12 months, to 5.00% (from our previous 5.50% projection), for fear of jeopardising the still-fragile economic recovery.

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