Colombia’s central bank board decided to suspend its six-month cycle of rate hikes last month due to the “high uncertainty” about the global economy and its potential impact on Colombia, the minutes from its last monetary policy meeting show.
The minutes, released Friday, also revealed that the bank is concerned lower prices for crude oil in international markets could take a toll on Colombia, which relies on petroleum sales for much of its foreign revenue.
“We have seen that the price for petroleum has begun to decline and this will undoubtedly affect the oil-exporting countries including Colombia,” it said.
Crude oil futures were down again Friday, at around $87 a barrel.
The bank board last month unanimously decided to leave interest rates on hold at 4.5% after six straight months of interest rate hikes that were aimed at preventing excessive economic growth and higher inflation.
The minutes noted the board was still planning more rate hikes, and that the August decision to pause was strictly due to the “high uncertainty in the international financial markets and their potential negative effect on the growth of the global economy in general and the Colombian one in particular.”
The minutes added that the “size and duration” of the problems in global financial markets remains unknown.
Some analysts say the bank board is likely to leave rates on hold again at its meeting later this month given that financial markets have remained on shaky ground over the past couple weeks.
Also, Colombian consumer inflation data for August, due out Monday, is expected to be near its lowest level of the year, which would provide more room for the bank to put off any further rate increases.