At its latest monetary policy meeting on 24 August, the Central Bank (BanRep) cut the reference interest rate by 25 basis points to 4.75%, in a unanimous decision widely expected by the market. The move marks the second interest rate cut in as many months, thus reversing the two 25-basis point rate hikes implemented in January and February. According to the Bank, second quarter figures corroborate that the global slowdown continues. In addition, international financial markets remain unstable, while risks stemming from the Euro area continue to affect confidence. Monetary authorities added that global trade and industrial data suggest the probability of a further slowdown in the world economy. This, in turn, is causing Colombian exports to slow down, according to BanRep. Regarding price developments, the Central Bank stated that inflation is moderating and that inflation expectations are generally easing. Monetary authorities added that the level of credit is moderating but remains high. Simultaneously, in order to provide the economy with some extra liquidity, the Bank announced another round of intervention in FX markets, by which BanRep will buy USD 700 million until the end of September. This decision was not expected by the market and appears to reflect the Central Bank's concern regarding the strength of the Colombian peso. The Central Bank maintains its core inflation target for 2012 unchanged at 3%, with a tolerance margin of plus/minus 1.0 percentage points
Colombia Monetary Policy
Central Bank cuts interest rates again
August 25, 2012
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Colombia Economic News
October 7, 2016
In what was a narrow and shocking result, Colombians rejected the peace agreement between the government and the FARC at the 2 October referendum.
September 30, 2016
In August, exports grew 7.0% over the same month last year, which sharply contrasted the 27.3% plunge recorded in July.
September 30, 2016
The seven-member board of the Central Bank (BanRep) unanimously decided to keep the reference interest rate unchanged at 7.75% at its 30 September monetary policy meeting.
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Industrial production unexpectedly shrank 6.2% annually in July, which contrasted the 6.7% increase seen in June.
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