Colombia Raises Benchmark Rate to 9%

As was widely expected by the market, Colombia’s Central Bank raised its benchmark interest rate 25bps, from 8.75% to 9%, at its monthly monetary policy meeting on Friday. This is the seventh consecutive month the bank has raised the rate. In a further move to fight inflationary pressures and to curb lending, the bank once again raised commercial banks reserves on deposits. The Central Bank is targeting inflation of between 3.5% and 4.5% this year. Inflation for the 12 months through May was 6.23%, well above that target while consumer prices for the first five months of the year rose to 4.42%.