Colombia's Central
Bank Holds Rates Stable
BOGOTA - Colombia's Central Bank kept the
country's interest rate unchanged at 3.5% in
its monetary policy meeting on Friday. The
record low rate was not cut further, despite
fears that the dramatic decrease in trade
with Venezuela, formerly the country's
second biggest trading partner, will damage
the economy.
Last year saw the interest rate slashed in
successive monetary policy meetings, from
10% in December 2008 to its present level,
to avert the effects of the global economic
crisis.
Now, with the economy on the mend, the
threat of inflation has become pressing,
discouraging the bank from carrying out any
further cuts.
The bank's decision was unanimous, says its
head Jose Dario Uribe.
“The available information shows that
quarterly gross domestic product levels
continue to recover,” Uribe continued. “The
bank’s board expects the actual interest
rate level will continue to stimulate
economic growth in an environment
characterized by a healthy financial
system," the banker said, as quoted by
Bloomberg.
The decision to keep rates level follows
December's monetary policy meeting, in which
the bank made the same judgement to leave
the rate at 3.5%.
Uribe announced last week that trade with
Venezuela was expected drop 60% in 2010, a
fall of $1.5 billion. This is a significant
blow to Colombia's economy, but is
outweighed by concerns about the rising rate
of inflation. |
|
|
|
|
| |
|
|
|
|
|
