Colombia Monetary Policy


Central Bank keeps key policy rate steady in February

The Central Bank (BanRep) left its reference interest rate unchanged at 3.25% at its most recent monetary policy meeting, which took place on 28 February. All of the LatinFocus Consensus Forecast panelists had expected the Bank to make this decision. The key policy rate is at the lowest level since February 2011, where it has remained since March 2013.

BanRep did not make any significant changes to its global growth outlook. Nevertheless, the Central Bank emphasized the economic recovery in advanced economies remains on track, while it underscored the weakness in emerging markets. In addition, the Bank acknowledged that a less accommodative global monetary policy has strengthened the U.S. dollar against the Colombian peso. Regarding domestic developments, the Bank stressed that economic indicators suggest that Q4 domestic growth was strong primarily due to robust investment. In terms of price developments, the Bank stated that annual inflation rose in January, thus falling within the Central Banks's tolerance margin of plus/minus 1.0 percentage points around its 3.0% target. The next policy meeting is scheduled for 28 February.

LatinFocus Consensus Forecast panelists see the policy rate at 4.19% at the end of 2014. Panelists expect the policy rate to end 2015 at 4.86%.

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Colombia Monetary Policy Chart

Colombia Monetary Policy February 2014

Note: Central Bank policy rate in %, eop.
Source: Colombia Central Bank.

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