Bank of the Republic of Colombia
October 31, 2016
As they had done at the two previous monthly meetings, members of the Board of Directors left the main central bank rate unchanged at 7.75%. From September 2015 to July 2016, a series of increases had lifted such from 4.50% in response to inflation well above target. “Strong transitory supply shocks are blamed.” Officials are hopeful that policy has been tightened enough. In a released statement, the new view is summarized as follows:
The Colombian economy continues to adjust to the strong shocks received since 2014, and the current account deficit is narrowing gradually. The dynamism of output has been weaker than projected, inflation has lowered, but inflation expectations exceed the target. The effects of the transitory supply shocks that have affected inflation and inflation expectations have begun to reverse, and this trend is expected to continue. In this context, the monetary policy actions undertaken so far contribute to the convergence of inflation to its target.
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Tags: Bank of the Republic of Colombia
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