Board of Colombia's Banco de la Republica keeps benchmark rate at 3¼%

By Caroline Salls

Pittsburgh, Oct. 25 - The board of directors of the Banco de la Republica de Colombia kept the benchmark interest rate at 3¼%, according to a news release.

The board said the global economy is expanding at a moderate pace, and the short-term dynamic has changed a bit compared to what was observed in previous quarters.

According to third-quarter indicators, the board said the eurozone is beginning to recover, but the growth of the United States may have suffered as a result of the partial closure of the federal government and increased uncertainty.

The bank said the emerging economies expanded at a slower pace, although the growth of China's gross domestic product was higher than expected by the market.

In addition, the board said the Fed's decrease in the monthly purchase of assets partially reversed increases in interest rates.

The board also cited a decrease in country risk indicators in Latin America and a slight appreciation of their currencies.

Also, the bank said the international price of oil and some raw materials imported by Colombia had fallen.

According to the release, available third-quarter data for Colombia suggests that economic activity expanded at a faster pace than in the first half of the year, driven by investment.

The board said consumption grew at a rate similar to that of the first half of the year. On the supply side, the board said the construction sector would be the main source of growth, followed by agriculture, mining and trade.

For the full year, the bank said its technical team projected a growth rate between 3½% and 41/2.

The board said bank credit is growing at stable rates higher than nominal GDP, and, in real terms, the interest rates of different types of credit, except for credit cards, are below historical averages and driving economic growth.

The bank said annual inflation remained stable in September at 2.27% compared to the previous month, and the same was observed with the average core inflation measures.

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