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

By Caroline Salls

Pittsburgh, Feb. 28 - The board of directors of the Banco de la Republica de Colombia decided to keep the benchmark interest rate at 3¼%, according to a news release.

The board said the outlook for global growth in 2014 remains largely unchanged compared to the outlook in a recently published inflation report. Global growth in 2014 is projected to exceed the 2013 numbers by just over half a percentage point.

The bank said the gradual recovery in advanced economies continues, and new emerging data confirm an expected slowdown in its growth rate.

In addition, the board said foreign interest rates and the dollar will outperform 2013 averages, and it is likely that a significant portion of these increases will be permanent because of less expansive levels of global liquidity.

According to the release, the international price of oil continues at high levels, and Colombian coffee already surpassed the average price achieved in 2013. As a result, the board said trade terms are likely to remain at favorable levels.

The bank said economic growth for 2014 is projected to be between 3.3% and 5.3%, with 4.3% the most likely growth rate.

The board said total credit growth slowed in January but continues to show increased rates higher than nominal gross domestic product.

Annual inflation in January was 2.13%, falling within the target range, and average measures of core inflation stood at 2.55%, the release said.

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