Colombian policy makers meeting last month said they expect growth in the economy and employment next year will be similar to that seen in this year, according the minutes of their Oct. 29 meeting.
The seven-member board, led by central bank chief Jose Dario Uribe, held the interbank rate at a record low 3 percent for a sixth straight month at the meeting and forecast economic growth next year at close to 4.5 percent.
The bank analyzed “forecasted growth of the economy and employment for 2010 and 2011 that suggests growth similar to what was seen in 2010,” the minutes said. “The economy is still being boosted by consumer confidence, the high terms of trade, the strengthening of business investment and the recovery of the financial system portfolio.”
President Juan Manuel Santos expects the economy to grow 6 percent annually within two years after 0.4 percent expansion last year. He intends to create 2.4 million jobs to bring the jobless rate down to single digits from 11.5 percent in September.
The peso fell 0.5 percent to 1,867.33 per dollar at 1:31 p.m. New York time from 1,858.50 yesterday.
The bank also discussed the currency’s effect on inflation and productive sectors and ways to ease gains in the peso, which has risen 9.5 percent this year. After the meeting, Uribe announced that the bank would purchase a minimum of $20 million daily in the spot market through at least March 15, two months longer than originally announced.
Policy makers said there is a “high degree of confidence” that inflation will end 2010 and 2011 in the lower half of the long term target range of 2 percent to 4 percent. Colombia’s annual inflation rate was 2.28 percent in September.
“The board emphasized that the information received indicates that the Colombian economy is growing at the pace predicted a couple of months ago without causing inflationary pressure,” the minutes said.
(Helen Murphy, Bloomberg)