Colombia Monetary Policy


Central Bank remains on hold as expected

At its latest monetary policy meeting on 28 May, the Central Bank (BanRep) left the reference interest rate unchanged at 5.25%, in a move widely expected by the market. The decision marks the third consecutive month in which the Bank remains on hold, following on two 25-basis point rate hikes implemented in January and February. The Central Bank stated that inflation in April was lower than expected, adding that while inflation expectations have stepped up slightly, inflationary risks remain moderate. Monetary authorities explained that the level of consumer credit remains high but its quality has experienced some deterioration. The Bank maintained its growth forecast of between 4.0% and 6.0% for this year, driven by strong domestic demand, but explained that both consumer spending and investment are expected to decelerate somewhat going forward. Monetary authorities added that recession risks in Europe have increased, causing a heightened uncertainty in the country


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Colombia Monetary Policy Chart

Colombia Monetary Policy May 2012

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

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