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Bloomberg
Colombia’s central bank cut interest rates to a record low in a split decision after inflation slowed below its target and the weak recovery left a quarter of urban workers still jobless.
Four of the bank’s seven-member board voted to reduce the benchmark rate by a quarter percentage point to 1.75%, Governor Juan Jose Echavarria said after the meeting. The other three voted to leave the rate unchanged at 2%.
The move was the seventh straight rate cut since the coronavirus pandemic hit Colombia in March, and is expected to be the last for the time being.
The decision was forecast by 13 of 22 economists surveyed by Bloomberg, while the rest had expected no change.
Colombia is suffering its deepest slump this year since records began, with more than three million jobs destroyed since March and widespread bankruptcies. Now, as the economy emerges from lockdown and life slowly returns to normal, policy makers are expected to gauge strength of recovery.
In August, Colombia’s annual inflation slowed to 1.88%, undershooting the target of 2% to 4% for a second straight month.