Colombia central bank keeps interest rate unchanged, ending cycle of rises
2023.06.30 14:52
© Reuters. An employee counts Colombian pesos in an exchange house, in Bogota, Colombia July 11, 2022. REUTERS/Luisa Gomzalez
By Nelson Bocanegra and Carlos Vargas
BOGOTA (Reuters) -Colombia’s central bank board on Friday unanimously held the benchmark interest rate steady for the first time in nearly two years, with the market anxiously awaiting signs of when policymakers may begin to cut rates as inflation cools.
All 22 analysts polled in a Reuters survey last week said the seven-member board would hold borrowing costs at 13.25%. The board raised the rate by 1,150 points during the increase cycle, which began in September 2021.
“The inflation expectations of economic analysts continued to decrease and are located at 6.4% at 12 months and at 4.0% at 24 months. By the end of 2024, they are located at 5.0% in the median of the sample,” the bank said in a statement announcing the decision.
Annual inflation was 12.36% in May, its lowest since October 2022, but still more than four times the bank’s long-term 3% target.
A majority of the analysts polled by Reuters expect the bank will hold the rate for a few months before beginning cuts in September or October, taking advantage of inflation’s fall to avoid a more severe slowdown in economic growth.
