Colombia’s President Juan Manuel Santos eased his demands on the central bank to halt its rate hikes while continuing to warn that the cycle of rate increases could be nearing its ceiling.
Santos said Monday in a radio interview that he had been “surprised” by the 23% increase seen in retail sales in April. The figure, Santos said, suggests “that we are growing too fast and there the central bank may have some reason to try to cool the economy.”
Last month the president urged that the central bank halt its cycle of rate increases, saying that higher borrowing costs could endanger economic growth. The central bank ignored his pleas and on Friday increased the benchmark lending rate by 25 basis points to 4.25%.
The central bank’s decision, however, was not unanimous and for the first time in several months it did not signal in its statement that the rate hikes were set to continue, leading many analysts to project that the bank could temporarily halt the rate increases.
On Monday, Santos said that he “was not criticizing the increase” in rates, but that the hike in borrowing costs was nearing its “ceiling.” Whether that ceiling is “4%, 4.25% or 4.5% it’s the same,” Santos said.