Colombia Keeps Rates On Hold

In line with market expectations, Colombia’s central bank has kept the monetary policy rate on hold at 3.5%. The bank cites better than expected inflation levels, which are at the low end of the target. Annual inflation in February was 2.09%, while aim is 2.00%-4.00%. Local brokerage Corredores Asociados says the rate is likely to stay put for some time to stimulate the economy. Morgan Stanley says Colombia does not appear to be in a hurry to hike rates as inflation data is still benign. “We suspect that recovery may prove stronger [than expected] and the central bank would shift into tightening monetary policy in 2H10,” the shop says.