Colombia’s central bank Monday left its benchmark interest rate unchanged, as expected, saying that while there was an uptick in inflation in late 2010 it was mostly supply-driven due to torrential rains and thus policy action is not needed.
The central bank said after the year’s first monetary policy meeting that it was keeping its key interest rate at 3%, a historic low it has been at now for the past nine months.
The central bank said if economic growth comes in as expected, or if inflation moves above it’s annual target range of 2% to 4%, it could start “to gradually withdraw the monetary stimulus” by hiking rates.
Finance Minister Juan Carlos Echeverry said that the economy could expand around 5% this year, adding that reconstruction efforts after devastating in the last months of 2010 could provide “an important catalyst growth.”
Jose Dario Uribe, the central bank chairman, said that “if the economy continues normalizing, the economy will need less monetary impulse.”
(Dan Molinski, Dow Jones)
