Colombia Monetary Policy


Central Bank leaves key policy rate unchanged in January

The Central Bank (BanRep) kept its reference interest rate unchanged at 3.25% at its most recent monetary policy meeting, which took place on 31 January. 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 stated that growth in advanced economies strengthened in Q4 2013, whereas growth in emerging markets was "heterogeneous". The Bank noted that the U.S. Federal Reserve's announcement to reduce its bond-buying program will likely increase financing costs for Colombia. Regarding domestic developments, the Bank stressed that economic indicators suggest that fourth quarter domestic growth was strong primarily due to robust investment. In terms of price developments, the Bank stated that annual inflation was below 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 4.21% at the end of 2014. Panelists expect the policy rate to end 2015 at 4.87%.

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Colombia Monetary Policy Chart

Colombia Monetary Policy January 2014

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

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