Central Bank of Colombia

March 21, 2018

Colombia’s monetary policy interest rate was left unchanged at 4.5%. It had been reduced by 25 basis points this past January and before that by 25 bps in December 2016, February 2017, March 2017, May 2017, July 2017, August 2017, October 2017, and November 2017, as well as by 50 basis points last April and June. Altogether, 325 basis points of interest rate relief was provided in the space of thirteen months, but at the time of this past January’s cut, officials also indicated that the rate cutting cycle may have now run its course. So no change was expected by investors, but in fact one of the seven members of the Board of Directors did cast a dissenting vote at this month’s meeting in favor of a 25-basis point reduction to 4.25%.

Colombian real growth was sluggish in 2017, and officials only project such improving to 2.7% this year. However, inflation exceeds the 3.0% target range mid-point, and there is concern that food price pressures might lift inflation expectations and delay inflation’s return to the center of its target range.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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