The Board of Directors at the Colombian Central Bank has unanimously decided to maintain the country’s interest rates at 13.25%, aligning with financial market expectations.
This decision came in light of recent inflation data which showed signs of a change in the upward trend that had been evident since the start of the year.
The annual inflation rate stood at 12.1% in June, a percentage point lower than the rate in December 2022, signaling progress in inflation control and positively impacting expectations.
However, despite these improvements, inflation remains high in comparison to the target, and the core inflation rate, excluding food and regulated items, persisted at a similar level of 10.5% as in previous months.
The economic activity in the second quarter was reportedly slower than anticipated as suggested by the Economy Follow-up Indicator (ISE) for April and May, and the latest industry and commerce survey. Yet, the labor market continued to perform well.
The growth rate of credit has slowed over recent months, leading to a relative decline in portfolio quality.
Nonetheless, credit establishments still maintain high capital levels and a strong liquidity position, adhering to stringent international regulatory standards.
Lastly, the Colombian peso has been steadily strengthening, returning to levels not seen since mid-2022.
This appreciation occurred alongside a reduction in the country’s risk premiums, outperforming other economies in the region.