Colombia’s central bank said on
Friday it kept its key overnight interest rate unchanged at 10
percent, a decision widely expected by the market, and set next
year’s inflation target at 5 percent.
The inflation target range for next year is 4.5 percent to
5.5 percent, the bank said in a statement. It also said it set
a mid-point target of 4 percent inflation for 2010.
In a Reuters poll on Tuesday, 28 out of 31 analysts said
they expected the bank to keep the interest rate unchanged at
the monthly monetary policy meeting. Three of the analysts
predicted a rate cut of 25 basis points.
Inflation this year is running way above Colombia’s 2008
target ceiling of 4.5 percent. Consumer prices rose an
unexpectedly large 0.35 percent last month to bring 12-month
inflation to 7.94 percent.
The central bank expects gross domestic product to expand
as little as 1 percent in 2009 as credit problems that started
with the U.S. subprime mortgage mess spread financial gloom
around the world.
Aside from expected reductions in foreign investment, job
creation and domestic consumption next year, Colombia and the
rest of Latin America is vulnerable to sliding prices for oil,
grains, metals and other commodities produced in the region. (Reuters)