Colombia: Central Bank keeps interest rates unchanged due to faltering growth prospects in Europe
December 16, 2011
At its 16 December monetary policy meeting, the Central Bank left its reference interest rate unchanged at 4.75%, as had been expected by the market. The Central Bank cited a bleak outlook for the Eurozone, which has probably fallen into recession in the last quarter of 2011 and will therefore dampen global economic growth, as the main driving factor behind its decision to maintain rates. Moreover, between January and November, accumulated inflation was 3.3%, which is below the upper limit of the Central bank's target of 3% with a tolerance margin of 1.0 percentage points. In addition, the Central Bank affirmed that the domestic economy remains buoyant and that bank credit seems to be accelerating. The Central Bank left its inflation target for 2012 unchanged at 3%, with a tolerance margin of 1.0 percentage points.