Colombia Pauses

Colombia’s central bank has elected to hold its benchmark interest rate at 4.50%, contrary, in-line with market expectations. With the global economic outlook deteriorating, about half of the market had expected the pause, shifting from a consensus call for a 25bp increase. As in other countries in the region, the inflation and domestic overheating concerns that spurred rate hikes in recent months, have taken a backseat to the fear of contagion from problems in the US and Europe. Chile also held its benchmark, at 5.25%, last week.