Central Banks in Colombia and Philippines Leave Key Rates Unchanged

December 18, 2009

The Bank of the Republic of Colombia kept a 3.5% benchmark interest rate.  Amid falling inflation and a recession that’s now over, the rate was slashed from a peak of 10% by 50 basis points in December 2008, 50 bps in January, 100 bps in each of the next four consecutive months, 50 bps in June, 50 bps in September and 50 bps in November — in all 650 basis points of easing.  Industrial production and retail sales remain below year-earlier levels, and the last on-year reading of CPI inflation, 2.4%, was at a 53-year low and within next year’s target of 2-4%.

Bankgho Sentral ng Pilipinas retained a key borrowing rate of 4.0%, its level since July.  Subsequent meetings in August, October, November and now December did not change policy even though CPI inflation has firmed to a six-month high of 2.8%.  Like Colombia’s central bank, monetary officials in the Philippines began a series of easing moves last December, cutting by 50 bps then and another 50 bps in January 2009 and following those moves with four cuts of 25 bps each in March, April, May and July.  Inflation remains within the 2.5-4.5% target range.  In neither of these central banks does a policy tightening seem at all imminent.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.


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