Colombia’s inflation has risen steadily, in line with central bank expectations, according to the May figures from Colombia’s National Administrative Department of Statistics (DANE) released on Thursday.
Prices increased on average 0.48% in the Colombian economy in May. This would translate to an annual rate of 2.93% in the Consumer Price Index (CPI), the standard measure of inflation, continuing on the upward trend of the last three months.
Inflation this year up to May has already outstripped the inflation rate for all of 2013, reported Bogota’s W Radio.
Prices rose fastest in the areas of leisure (2.27%) and food (1.18%).
In response to the upward trend, the board of Colombia’s central bank, Banco de la Republica, voted unanimously on Friday to cut back stimulus and increase their key interest rate to 3.75%. The central bank said inflation was still within the targeted 2-4% range.
MORE: Colombia’s Central Bank hikes rates again as economic growth gains momentum
Central bank rate hikes generally make it more expensive to borrow and this usually means people are less likely to spend freely. This consequently limits the rate of inflation, the increase in price of goods and services over time.