Colombian inflation was a
lower-than-expected 0.01 percent in May versus the 0.93
percent consumer price increase registered in the same month
last year, the government’s statistics department DANE said on
Friday.
The market had expected inflation of 0.27 percent in May
of this year, according to a recent Reuters poll of analysts.
Over the 12 months through May, inflation in this Andean
country was 4.77 percent, within the central bank’s 2009
target range and far below the 6.39 percent recorded in the 12
months through May 2008.
Inflation has been tamed in Colombia as the country’s
economy slows under the weight of the world financial crisis.
The central bank has slashed its key overnight policy rate
to 5.0 percent from 10 percent since December in a bid to spur
growth.
“This inflation number will allow the central bank to cut
its policy rate by 50 basis points this month, and then hold
the rate steady at 4.5 percent through the rest of the year,”
said Kathryn Rooney, emerging markets analyst at Bulltick
Capital Markets in Miami.
The bank’s next monetary policy meeting is on June 19.
“There is also a high probability that the central bank
will relax private bank reserve requirements in the second
half of the year if credit growth fails to react in the next
few months,” Rooney said. (Reuters)