Colombia holds rates at 4.75%, supporting market growth expectations
Interested in GXG? Don't miss the next report.
Receive e-mail alerts for new research on GXG
On October 26, 2012, the Colombian Central Bank held its lending rate steady at 4.75%. This action was in line with expectations in the market, as reflected in the Inflation Expectation Survey by the Central Bank. They survey showed that economists expect inflation to be close to 3% for 2012, which is right at the target rate. The Central Bank maintains an inflation targeting policy that aims to keep inflation between 2% and 4%.
While rates were unchanged, InterBolsa FTSE Colombia 20 ETF Profile (GXG) investors can interpret this action a sign of confidence in the Colombian market growth supported by low inflation expectations. Furthermore, economists believe that the rate may be cut to 4.5% in February, which would further fuel growth in the market as long as inflation stays within the accepted range.