The Central Bank of Colombia kept its benchmark monetary policy interest rate steady at 4.50%. The Bank said [translated]: "The international environment has deteriorated in the weeks after the last Board (meeting). Concerns about sovereign debt problems have grown and growth forecasts in the U.S. and Europe in 2011 and 2012 have been revised downwards. In some of the economies of Asia and Latin America, new information points to a moderation in growth. International prices of commodities have fallen but remain at high levels." The Bank also said: "considering the extreme volatility in financial markets, the Bank of the Republic shall call auction in the spot market for an amount of U.S. $ 200 million when the representative market rate (TRM) deviates 2% or more (down or up) moving average of order 10"
The Central Bank of Colombia's last move was an increase of the interest rate by 25 basis points to 4.50% at its July monetary policy meeting this year, following a 25bp increase in June. Colombia reported annual inflation of 3.27% in August, 3.42% in July, 3.23% in June, 3.02% in May, and 2.84% in April; which compares to the Bank's inflation target of 3%. Goldman Sachs had previously forecast 2011 GDP growth at 5.5%, while Morgan Stanley had forecast just 4.9% growth for the Colombian economy. Colombia reported annual GDP growth of 4.8% in the June quarter and 5.1% in the March quarter, while the bank said the 2011 full year forecast of 4.5% - 6.5% is highly probable. The Colombian peso (COP) last traded around 1,918 against the US dollar, placing the COP virtually flat compared to the start of the year.
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