Central Bank of Colombia

March 24, 2017

A statement has been released after the third 25-basis point reduction of Colombia’s benchmark interest rate in four months. The rate becomes 7.0%, lowest since last May. From April 2014 until July 2016, 15 25-basis point interest rate hikes were engineered by monetary authorities. While inflation of 5.2% in February was higher than the 3% target that is sought, there have been seven monthly decelerations in a row, and the decline this quickly exceeds the expected path of policymakers. Moreover, growth has been weak, risks of overcapacity have risen, and international uncertainties are mounting. Officials are concerned that the real central bank interest rate is currently too contractionary. More rate reductions seem probable.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



Comments are closed.