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Colombia Monetary Policy January 2020

Colombia: Central Bank stays put at its first meeting of the year

Colombia’s Central Bank (BanRep) left the benchmark interest rate unchanged at 4.25% at its latest Board of Directors meeting on 31 January. The decision was unanimous and in line with market expectations. The rate has thus remained at the same level since 27 April 2018 when it was cut by 25 basis points.

The decision to hold rates came amid upbeat domestic growth dynamics and within-target inflation. In December, inflation inched down to 3.8% (November: 3.9%) and is expected to continue to converge to the Bank’s target of 3.0% on the gradual fading effects of supply shocks. Meanwhile, the Bank maintained its growth projections for 2019 and 2020 at 3.2% and 3.3%, respectively.

Looking ahead, the Bank stated it will closely monitor future inflation and economic activity. Moreover, it will be alert to developments related to the balance of payments and the external context, in particular to the economic effects of the coronavirus outbreak. Thus, monetary policy “will continue to depend on the new information available”.

The next monetary policy meeting will be held on 27 March.

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