March 22, 2019 / 7:12 PM / 5 months ago

UPDATE 1-Colombia's central bank holds interest rate

(Adds quote, details)

BOGOTA, March 22 (Reuters) - Colombia’s central bank held its key interest rate steady on Friday, a decision that may extend through year-end as policymakers see an “especially quiet” 2019 with inflation hovering just above the long-term goal amid moderate economic growth.

The unanimous decision met the expectations of a majority of analysts in a Reuters survey last week.

The bank was expected to begin increasing borrowing costs during the second half of the year, taking the rate to 4.75 percent by the end of 2019, but central bank governor Juan Jose Echavarria indicated the next increase could be held off until next year.

“I hope so,” he said after reading the statement. “We’ll see, but if there are changes they will be slight ... It’s a year that until now has been especially quiet.”

That would match analyst expectations and be in line with the U.S. Federal Reserve.

The central bank has kept the rate at its current level since last April, when it made its final cut of 25 basis points.

“For now and in the coming months, it’s most likely that the bank will maintain the interest rate stable given the economy is recovering at a modest rhythm and inflation is very controlled and without significant risks,” said Camilo Perez, head economist at Banco de Bogota.

So far this year the international price of oil has increased but remained below the average in 2018, the bank said, adding that the country risk premium had fallen and the peso appreciated against the dollar.

While the government sees economic growth this year at 3.6 percent, the central bank and International Monetary Fund see 2019 expansion slightly lower, at 3.5 percent, with the nation’s recovery gaining momentum despite slowing worldwide expansion.

“The outlook for global growth continues to be moderate. The Federal Reserve kept its reference interest rate unchanged and no changes are expected in this rate for the remainder of 2019,” the board’s statement said.

Colombia’s annual inflation last month was 3.01 percent, just above the bank’s long-term inflation target of 3 percent.

The central bank also said it would auction another $400 million of put options to accumulate international reserves on April 1. The options will be valid between April 2 and April 30, 2019, it said in a separate statement. (Reporting by Helen Murphy, Julia Symmes Cobb, Nelson Bocanegra and Carlos Vargas in Bogota)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below