National interest rates are to be held at 3.25% according to a statement released by Colombia’s Central Bank on Friday.
This decision marks the continuation of the historically low interest rate of 3.25%, which the Central Bank has maintained since March 2013. According to Managing Director of the Central Bank, Jose Dario Uribe, the decision was made after a “detailed analysis of the situation of the economy, inflation and international issues.”
Between July 2012 and March 2013, the Central Bank cut two percentage points with regards to interest rates in an attempt to bolster the economy. This has been maintained since March as low interest rates stimulate aggregate spending and hopefully contribute to the production capacity of the economy as inflation approaches 3% in 2014.
According to the report the decision was made as the prospects for global growth in 2014 remain largely unchanged.
With regards to the economy so far in 2014, in January, total credit growth slowed but was still visible and the nominal credit interest rates increased but remained stable with current levels being viable for driving economic growth.
Colombian inflation in January stood at 2.13 %, falling within the target range stated by the Central Bank in 2013, and core inflation stood at 2.55% . Analysts have predicted that inflation will peak at around 3% in 2014.
The Board will continue to carefully monitor the performance and economic activity of Colombia, especially with regards to inflation. asset markets and the situation internationally.