Colombia Moves To Dampen Inflation

Colombia’s government moved to stem inflation on Monday by raising commercial banks’ reserves on customers’ deposits, which in turn will curb retail lending. The banks will now have to send 27% of new checking account deposits, 12.5% of savings accounts and 5% on CDs with maturities less than 18 months, up from levels of 13%, 6% and 2.5% before. In another measure aimed at damping down the economy, the Bank is imposing a 40% deposit requirement on all corporate and government external borrowing to slow down the inflow of dollars.