Colombia’s central bank is expected to keep the benchmark interest rate unchanged at 3.5% for the fourth month in a row in its monetary policy meeting Friday.
Finance Minister Oscar Ivan Zuluaga predicted that the rate would stay unchanged, commenting that “There is no reason to think of any different position, and today’s economic conditions, slow economic growth, monetary behaviour and inflation allow for stability in monetary policy.”
A poll by Reuters found that analysts expected Colombia to keep the interest rate unchanged.
Despite figures released Thursday which show that Colombia’s GDP grew a better-than-expected 0.4% in 2009, the bank is likely to judge that the interest rate should be kept low in order to stimulate the economy. Inflation remains within the target of 2-4%, meaning that there is no need to raise the interest rate to control inflation.
If the predictions are correct, then this will be the fourth successive monthly meeting at which the bank has decided to leave the rate unchanged, after reducing it by 6.5 points in successive meetings over the course of 2009.
The bank slashed the benchmark interest rate from 10% in December 2008 to its current record low, in an attempt to boost Colombia’s economy during the global downturn.
