2024-04-30 23:02:12
The Board of Directors of the Bank of the Republic has made a significant decision in its most recent meeting: reduce the monetary policy interest rate by 50 basis points (bps) to reach 11.75%.
The vote, although majority, was marked by different opinions among the directors. Five of them supported the 50 bps reduction, while one advocated a more aggressive cut of 75 bps and another proposed an even larger cut of 100 bps. This diversity of opinion underscores the complexity of current economic conditions.
In making this decision, the Board of Directors considered several key elements. ANDFirstly, there is a downward trend in inflationwith records of 7.4% in total inflation and 6.8% in inflation without food or regulated in March, consolidating a downward trajectory that began in 2023. This trend has been driven mainly by the decrease in prices in the baskets of goods and food.
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On the other hand, analysts’ inflation expectations remain stable, although above the target, while economic growth projections have been revised upward, incorporating positive performance in some sectors during the first months of the year.
However, there are persistent challenges, such as the slight but constant increase in the unemployment rate nationally and in major cities, as well as international economic conditions, especially in the United States, where inflation persists above the target and a tight labor market.
With this measure, the Bank of the Republic seeks to continue promoting economic growth, while maintaining a monetary policy stance consistent with the objective of bringing inflation to its goal by mid-2025.
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