Colombia: Central Bank on hold at November's meeting
November 29, 2013
The Central Bank (BanRep) kept its reference interest rate unchanged at 3.25% at its most recent monetary policy meeting, which took place on 29 November. The wide majority of LatinFocus Consensus Forecast panelists had expected the Bank to make this decision. The key policy rate has been at the current level since March 2013. This is the lowest rate since February 2011.
BanRep stated that growth in advanced economies continues to improve, whereas economic activity remains below potential in emerging markets. While the Bank noted that domestic growth in the third quarter was barely in line with the performance recorded in the second quarter, more recent indicators suggest that a recovery is taking place in consumer sentiment as well as in the manufacturing sector. In terms of price developments, the Central Bank stated that annual inflation decelerated sharply in October, which was mainly due to seasonal factors related to food prices. As a result, expectations for inflation in the next twelve months eased, although they still remain anchored within the Bank's tolerance margin of plus/minus 1.0 percentage points around its 3.0% target. The next policy meeting is scheduled for 20 December.
LatinFocus Consensus Forecast panelists see the policy rate at 3.23% at the end of 2013. Panelists expect the policy rate to end next year at 4.16%.