Friday, August 19, 2011

Central Bank of Colombia Holds Interest Rate at 4.50%

The Central Bank of Colombia held its benchmark monetary policy interest rate unchanged at 4.50%.  The Bank said: "The board considered it prudent to pause in interest rate increases, especially given the high uncertainty in international financial markets and their potential negative effect on the growth of the world economy in general, and Colombia in particular,".  On its own economy, the Bank said (translated): "the Colombian economy maintained good growth, driven primarily by strong household consumption.  Indicators of consumer confidence and the industry continue at high levels and the growth of credit to households and businesses continue to grow in an environment of real interest rates below their historical averages.  The GDP growth forecasts published in the last Inflation Report remain unchanged".

Previously the Central Bank of Colombia increased its interest rate by 25 basis points to 4.50% at its July monetary policy meeting this year, following a 25bp increase in June.  Colombia reported annual inflation of 3.42% in July, up from 3.23% in June, 3.02% in May, and 2.84% in April; which compares to the Bank's inflation target of 3%.  Goldman Sachs previously forecast 2011 GDP growth at 5.5%, while Morgan Stanley had forecast just 4.9% growth for the Colombian economy.  The Bank noted that Colombia saw economic growth of 5.1% in the first quarter.  The Colombian peso (COP) last traded around 1,783 against the US dollar, placing the COP up about 8% this year.


Post a Comment