Colombia Central Bank Makes Surprise Rate Hike

In a move that surprised the markets, Colombia’s Central Bank raised the benchmark lending rate Friday by a quarter of a percentage point to 6.25%. The Bank chose to preempt inflationary pressures by raising the rate for the first time since April 2003. The move is also seen by the market as a demonstration of the Bank’s independence, coming as it does just ahead of presidential elections in May and just after comments by President Uribe that he didn’t want to see any rises in interest rates.