Colombia’s Central Bank Stays on Hold

The Colombia’s central bank (Banrep) left its benchmark interest rate unaltered at 3% at its September 24, 2010, meeting, along with the market and RGE’s expectations. Although the latest inflation data was above Banrep’s expectations, inflation remains in line with Banrep’s technical studies, which show that inflation will probably rest within the target range in 2010 and 2011. According to the Banrep’s press release, core inflation remains stable and inflation expectations rest at low levels. The economic recovery is evolving as expected, and is not generating inflationary pressures. Recovering growth is witnessed through consumer confidence, private investment and the recovery of the financial system. With respect to the global economy, the press release mentioned that growth in Europe and in the U.S. will be less than previously forecast, while Asia and Latin America show better dynamics. Conditions are favorable for the sustainability of Colombia’s growth.

Editor’s Note: This post is excerpted from a much longer analysis available exclusively to RGE Clients, LatAm Focus: Week Ahead (Week of September 27, 2010)

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