{"id":67426,"date":"2015-01-30T13:41:19","date_gmt":"2015-01-30T18:41:19","guid":{"rendered":"http:\/\/countingpips.com\/?p=67426"},"modified":"2015-01-30T14:00:37","modified_gmt":"2015-01-30T19:00:37","slug":"colombia-holds-rate-temporary-inflation-rise-from-peso","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/01\/colombia-holds-rate-temporary-inflation-rise-from-peso\/","title":{"rendered":"Colombia holds rate, temporary inflation rise from peso"},"content":{"rendered":"
January 30, 2015<\/div>
\r\n<\/div><\/div>

By CentralBankNews.info<\/u><\/a>
\n    Colombia’s central bank maintained its benchmark intervention rate at 4.5 percent and said it hopes there will only be a temporary rise in inflation from the devaluation of the peso, which will stimulate exports and import-competing businesses and moderate the negative impact on government finances.
    The Central Bank of Colombia, which raised its rate by 125 basis points from April through August 2014,  added that domestic demand continues to show improving momentum in the context of full capacity utilization while there is some uncertainty about the impact of the declining terms of trade from lower oil prices on aggregate demand.
    As an oil exporter, the over 50-percent drop in crude oil prices is having an adverse effect on Colombia’s trade balance and public finances, but the central bank said this will partly be offset by the depreciation of the peso and a positive impact on global growth.
    The peso started depreciating sharply in late July 2014 and fell 25 percent to 2,459 to the U.S. dollar earlier this month before stabilizing in recent weeks. Today it was trading at 2,451 to the dollar.        
    After accelerating all year, Colombia’s inflation rate stabilized in December, rising to only 3.66 percent from 3.65 percent in November. The central bank targets inflation at a midpoint of 3.0 percent within a tolerance range of plus\/minus 1 percentage point.
    Colombia’s Gross Domestic Product rose by 0.6 percent in the third quarter after contracting by 0.1 percent in the second quarter for annual growth of 4.2 percent, down from 4.3 percent in the second quarter.
    Recent data suggest that domestic demand continued to expand in the fourth quarter with growth estimated at 4.0 percent. For 2014 the economy is estimated to grow between 4.5 and 5.0 percent, with the most likely figure of 4.8 percent, above expectations.
<\/a><\/p>\n

    The Central Bank of Colombia issued the following statement: (translation by Google)
  <\/p>\n