BOGOTA, Sept 30 Colombia's central bank kept
its benchmark interest rate steady on Friday at 4.50 percent in
line with market expectations. [ID:nS1E78T0QX]
Following is a translation of the text of the announcement
published on the central bank's website:
The Board of the Central Bank at its meeting today decided
to keep the benchmark interest rate unchanged at 4.5 percent.
The decision was made taking into account the following:
* The international environment has deteriorated in the
weeks after the last board meeting. Concerns about sovereign
debt problems have grown, and growth forecasts in the United
States and Europe in 2011 and 2012 have been revised down.
* In some of the economies of Asia and Latin America, new
information points to a moderation in growth. International
prices of commodities have fallen but remain at high levels.
* In Colombia, the first half data showed economic activity
expanding at a good pace (5 percent), similar to what was
projected. Growth has been driven by the strong dynamism of
domestic demand, especially from the private sector which grew
in the second quarter at an annual rate of 11.7 percent. For
the third quarter, new available information suggests that
growth could be higher than in the first half. Thus, the growth
forecast range for 2011 (between 4.5 percent and 6.5 percent)
continues to have a high probability.
* Annual growth in bank lending has stabilized at a high
rate in an environment of real interest rates of loans that
increased but remain below historical averages. The most
dynamic portfolio remains consumption, with increases almost
three times higher than the estimated nominal GDP growth for
2011. The index of prices for new housing continued to rise and
peaked in July, the series record, calculated since 1997.
* Inflation expectations at different periods and inflation
forecasts for the end of 2011 and 2012 have not had major
changes and are within the target range.
In this context, the balance of risks was not substantially
changed from the previous month. For this reason, the board
considered it appropriate to continue the pause in benchmark
interest rate increases. It also considers that the current
rate level keeps it in a good position to respond to new
information on the global and national economies.
The Board will continue carefully monitoring the
international situation, and the projections and behavior of
inflation, growth, the behavior of asset markets and reiterated
that monetary policy will depend on the new available
Finally, given the recent behavior of the exchange market
and increased international economic uncertainty, the board did
not renew the program of daily purchases of international
reserves. In turn, considering the extreme volatility in
financial markets, the central bank shall call auctions in the
spot market for an amount of $200 million when the
representative market rate (TRM) deviates 2 percent or more (up
or down) from its moving average of the order of 10.