Colombia: Inflation accelerates in January
February 7, 2011
In January, consumer prices added 0.91% over the previous month, accelerating from the 0.65% rise observed in December and came in above/below market expectations of a -.--% increase. Increasing transport prices (+1.73% month-on-month) and food prices (+1.61% mom) were the main drivers behind the monthly price rise. As a result, annual headline inflation stepped up from 3.2% in December to 3.4% in January. The core inflation index, which excludes more volatile items such as fresh food and fuels added -.--% in January, pushing annual core inflation from 3.2% in December to -.-% in January. At its monetary policy meeting held on 31 January, the Central Bank left the reference interest rate unchanged at a historic low of 3.00%. This is the ninth consecutive month the policy rate has not been altered. However, accelerating inflation may soon prompt monetary authorities to raise interest rates in the near future. Currently, inflation remains within 1.0 percentage point tolerance margin of the Central Bank's 3.0% target.