Monetary Tightening Paused in Colombia

August 22, 2011

In the face of intensifying global uncertainties, officials at the Central Bank of Colombia retained a 4.5% key overnight interest rate.  Most analysts were looking for a seventh consecutive monthly tightening.  The cyclical low of 3.0% had been maintained from end-April 2010 until an initial hike this past February, which was followed with increases in March, April, May, June and July — each by 25 basis points.  Colombia has experienced solid growth led by consumption and other elements of domestic demand.  CPI inflation, however, has risen about a percentage point over the past year and now exceeds 3.0%.

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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