Monetary Policy Also Unchanged in Colombia

September 2, 2009

This past Friday the central bank in Colombia, which implemented six rate cuts totaling 500 basis points during the first half of 2009, left its policy rate at 4.5% for the second time this quarter.  Policy is more even-sided now, balancing the priorities of recovery and price stability, but many analysts are unwilling to bet against the likelihood of more rate reductions before the cyclical floor is reached.  Real GDP fell 0.6% in the year to 1Q09 despite an upturn that quarter.  CPI inflation has been more than halved to a latest 12-month increase of 3.3%.

Copyright Larry Greenberg 2009.

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