An increase in Colombia’s benchmark interest rate is unlikely due to the financial crisis in Europe, a central bank board member told Reuters Wednesday.
Cesar Vallejo, a member on the board of Colombia’s central bank, said the financial crisis in Europe is threatening economic growth in the country.
“While there is uncertainty, risk, I think it’s unlikely that the bank will raise the rate again unless something very special happens like a positive external shock which stimulates the Colombian economy,” said Vallejo.
Vallejo also said that if necessary, the board would even cut the interest rate to encourage economic growth.
The central bank board last raised the benchmark rate in February 2012 by 25 base points to its current level of 5.25%, in response to inflationary pressure resulting from expanding consumer credit and favorable trade terms.
Since then, during meetings held in the final days of March, April and May the board decided to leave the interest rate unchanged.