Colombia: Central Bank leaves key policy rate unchanged for 5th consecutive month
August 30, 2013
The Central Bank (BanRep) kept its reference interest rate at 3.25% at its most recent monetary policy meeting on 30 August. This decision was expected by a wide majority of LatinFocus Consensus Forecast panelists. The key policy rate has remained at this level since March 2013 and currently sits at its lowest point since February 2011.
BanRep stated that the Colombian peso has weakened against the US dollar along with other emerging economies' currencies. In terms of price developments, the Central Bank stated that July's annual inflation figure of 2.2% was somewhat lower than expected, but was still within the Bank's tolerance margin of plus/minus 1.0 percentage points around its target of 3%. Inflation expectations continue to fall, but also remain within the margin. In this context, BanRep expects that maintaining its key policy rate will help stimulate domestic economy growth.
LatinFocus Consensus Forecast panelists see the policy rate at 3.29% at the end of 2013. For next year, panelists expect the policy rate to end the year at 4.30%.
Author: Carl Kelly, Economist