But the Central Bank of Colombia, which has raised its rate by 125 basis points from April through August, added that the terms of trade were declining and there was increased uncertainty about the global economy, including the cost of external financing, which could impact aggregate demand and the exchange rate.
The central bank issued the following statement:
"The Board of the Central Bank in its meeting today decided to keep interest rates at 4.5% intervention. For this decision, the Board took into consideration mainly the following aspects:
- New projections for world economic activity for the remainder of 2014 and 2015 suggest that the average growth of our business partners will be less than estimated earlier. External demand would be driven mainly by the US economy, while the euro area for low dynamism expected. China would have a slowdown, and some countries partners in the region will grow at less than their average rates of recent years.
- The risk premiums of several emerging countries have deteriorated and their currencies have depreciated against the dollar. This, in an environment of slowing economies and falling prices of basic goods they export.
- The international price of oil has fallen and is below the forecast that had the technical team. This has led to a deterioration in the terms of trade of the country, despite international coffee prices remain high and the prices of other commodities have fallen Colombia matters. If the fall in the terms of trade will adversely affect the growth of national income.
- In Colombia, the new indicators suggest GDP growth in the third quarter of 2014 similar to that predicted in previous months. The behavior of retail sales, consumer credit, the consumer confidence index and the labor market indicate that consumption remain strong dynamics. The increase in foreign purchases of machinery and transport equipment, and the trend for civil works, provide a good investment performance, although lower than those observed in the first semester fees. Foreign trade indicators suggest that net exports have a negative contribution to growth. By 2014 the crew estimated growth of between 4.5% and 5.5%, 5%, and more likely figure.
- The annual inflation in September, 2.86%, was in line with expectations by the technical team. The average of the four indicators of core inflation declined and stood at 2.63%. Estimates suggest that at year-end inflation may be in the upper half of the target range.
- The average inflation expectations one year analysts and papers arising from government debt with longer maturities are stable and slightly above 3%.
In summary, aggregate demand continues to show strong growth in the near to full utilization of productive capacity context. At the time, inflation expectations remain around 3%. This occurs in an environment of declining terms of trade and increased uncertainty about the recovery in global economic activity and the cost of external financing, factors that can influence the aggregate demand and the exchange rate. Made assessing the balance of risks, the Board considered it appropriate to maintain unchanged the benchmark interest rate.
The Board will continue to carefully monitor the behavior and projections of economic activity and inflation in the country, asset markets and the international situation. Finally, he reiterated that monetary policy will depend on the information available."