Colombia cuts benchmark rate by 50 bps to 9.5%

By Richard Connell

New York, Dec. 19 - The Board of Directors of Colombia's Banco de la Republica cut its interbank interest rate by 50 basis points to 9.5% at its meeting on Friday, according to a press release issued by the bank.

The board noted that the domestic economy has slowed considerably, due to the ongoing international financial crisis, affecting both consumers and businesses.

The board also pointed out that the country's major trading partners were suffering as well, causing a rapid decline in the value of Colombia's exports.

Inflation fell in November to 7.73% from 7.94%, and the board foresees the slowdown bringing it down further to within the target range of 4.5% to 5.5% in 2009.

The board voted unanimously for the rate cut to 9.5%, the first reduction in over three years.

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