Colombia's Banco de la Republica ups benchmark rate by 25 bps to 4¼%

By Melissa Kory

Cleveland, June 20 - The Board of Directors of Colombia's Banco de la Republica raised its benchmark interest rate by 25 basis points to 4¼% at its meeting on June 17, according to a press release issued by the bank.

The board noted that inflation rose in May to 3.02%, reflecting an increase in the prices for food.

The economic activity indicators for a large number of the developed economies like the public debt crisis in some European countries suggest that the recovery in those countries could be slower than estimated.

However, the strength of the demand in emerging countries is continuing and their international prices are staying at high levels.

The increase in the benchmark rate is intended to keep inflation within the target range for 2011 and 2012 and will contribute to preventing future financial imbalances, the bank said.

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