Analysts predict that the seven-member board will be split, as it has been at the last two meetings.
Reuters polled 20 analysts last week, and nine said the bank would keep the benchmark rate at 13.25%, its highest level in 24 years.
Six analysts predicted a 25-basis point cut, while five predicted a 50-basis point cut.
The rate would be reduced for the first time since September 2020.
“The slowdown in economic activity will be the main point of disagreement among the central bank board. A rate cut in December is still possible,” Scotiabank said in a note, though it added inflation risks remain and the minimum wage hike for next year has not yet been agreed, which may motivate some policymakers not to hold borrowing costs.
The meeting comes a day after the statistics agency reported that gross domestic product fell 0.41% year on year in October, the third consecutive monthly decline.
Though inflation was 10.15% year on year in November, falling short of market expectations, and is expected to end 2023 in the single digits, it remains well below the bank’s long-term 3% target.
The El Nino weather phenomenon, the minimum wage increase, and increases in diesel prices that could spark trucker protests are inflation risks in the first quarter of next year, according to Wilson Tovar, head of analysis at Acciones y Valores, and will necessitate “prudence” on the board’s part.
Even if the board decides against a cut on Tuesday, many analysts expect one in January.
According to a Reuters poll, the interest rate will be 8% next year and 5.5% in 2025.