Bloomberg News

Colombia Central Bank Leaves Options Open on Next Rate Move

October 14, 2011

(Updates with bank comment in second, fourth paragraphs.)

Oct. 14 (Bloomberg) -- Colombian policy makers last month kept the benchmark rate unchanged at a two-year high, arguing that future decisions would depend on changes to the “risk balance” between the “strong dynamics” of Colombia’s economy and “more risks and uncertainty” abroad.

In a second straight unanimous vote, the board on Sept. 30 kept the rate at 4.5 percent, which policy makers said is “in a good position to answer to the new information,” according to the minutes of the meeting published today on the central bank’s website.

Policy makers kept the key lending rate unchanged for a second month after raising borrowing costs at their seven previous meetings, noting “high uncertainty” about the “fiscal situation of some developed markets,” according to minutes. At the same time, policy makers said they expect third- quarter growth in South America’s fourth-biggest economy will exceed the pace seen in the first half of 2011 and still see the economy expanding as much as 6.5 percent this year.

“The Board will continue to carefully monitor the international situation, together with inflation behavior and forecasts, growth, active markets behavior, and it reiterates that future monetary policy will depend on the new information available,” policy makers said in the minutes.

The peso rose 0.3 percent to 1894.85 per dollar at 12:57 p.m. New York time from 1901.03 yesterday.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: Robert Jameson at rjameson@bloomberg.net


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