The central bank of Colombia has ignored calls to intensify the process of cutting interest rates.

Currently, officials of the mentioned financial institution are weighing the risks that caused the peso to fall to its lowest level in more than a year.

The seven-member board voted 4-3 to lower the benchmark rate by half a percentage point. Currently, the corresponding indicator is at 9.75%. On Thursday, October 31, Governor of the сentral bank of Colombia Leonardo Villar told reporters in Bogota about it. A minority voted for a larger cut of the mentioned figure to 9.5%.

Leonardo Villar said that the lowering of borrowing costs, which was decided on Thursday, continues to support economic growth and maintain the necessary prudence, given the continuing inflationary risks.

It is worth noting that the vast majority of economists surveyed by the media predicted the mentioned action of the central bank of Colombia. For this reason, the decision taken on Thursday by the financial regulator cannot be called unexpected or contrary to the most common assessment of the economic situation in the country.

Colombian President Gustavo Petro, Finance Minister Ricardo Bonilla, and private bankers have repeatedly stated the need to accelerate the process of easing monetary policy. At the same time, officials of the country’s central bank refrain from such actions, fearing an increase in inflation.

The example of Colombia is significant in the sense that in this case, the actions of financial officials are independent of calls from the political leadership and the opinion of the banking sector. Over time, it will become known whether the financial regulator was right to strictly follow its considerations about the most appropriate monetary policy.

As we have reported earlier, Bank of Canada Cuts Interest Rates.