Central Bank of Colombia

September 27, 2013

Another monthly Board of Directors meeting ended today without a change in the 3.25% benchmark interest rate.  The last change was a reduction of 50 basis points on March 22 that punctuated a seven-move drop from 5.25% in which all six prior moves had been declines of 25 basis points.  The streak began in July 2012.  A prior cycle of tightening between February 2011 and February 2012 had lifted the interest rate by 2.25 percentage points to 5.25%.  Since the easing last March, Colombian economic growth has picked up more quickly than anticipated, and inflation has climbed from 1.8% to marginally shy of 2.3%, which again lies within the central bank’s 2-4% target range.  As in August, it appears that today’s decision was not a unanimous one, nor were all analysts convinced beforehand that an eighth cut would not be done in the wake of the Fed’s delayed tapering of quantitative easing.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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