Colombia: Inflation remains stable in October
October 5, 2010
In October, consumer prices dropped 0.09% over the previous month, which was slightly less than the 0.13% fall observed in September but contrasted market expectations, which had seen prices rising 0.3%. The monthly drop reflected lower prices for food as well as for clothing, which more than offset higher prices for housing. Annual headline inflation remained unchanged at September's 2.3%. The core inflation index, which strips out more volatile items such as fresh food and fuel, added 0.10% in September, the latest month for which data are available. As a result, annual core inflation remained unchanged at August's 3.0%. Owing to the benign inflationary environment and the evidence of the strong economic recovery, the Central Bank left the reference interest rate unchanged at a historic low of 3.00% at its latest monetary policy meeting on 29 October. Policy makers maintained their stance that inflation will remain moderate in the coming months, thus permitting authorities to maintain an accommodative position in order to contribute to economic growth. The Central Bank has set a 2.0% 1.0 percentage points inflation target for 2010 and currently expects inflation to end the year at around 3.0%. The next monetary policy meeting is scheduled for 19 November.