Colombia lifts key interest rate to 3%

Bloomberg

Colombia’s central bank raised borrowing costs for the third straight meeting as inflation accelerates amid forecasts for the biggest economic expansion in at least a century.
The bank lifted its benchmark interest rate by half a percentage point to 3% in a split decision, Governor Leonardo Villar told reporters, adding that three of the seven board members voted for a steeper hike of 75 basis points. The move was expected by 23 of 26 economists surveyed by Bloomberg, with the remaining three estimating a bigger increase.
“Inflation expectations increased above the 3% target,” policy makers wrote in a statement accompanying their decision. “That risks inducing an indexation process that would lead to higher inflation levels.”
Colombian policy makers estimate the economy will expand nearly 10% this year, the most in at least 100 years, after beating expectations in the third quarter. Its post-pandemic recovery is being further helped by
rising prices of oil, coal and
coffee — the country’s main export products.