Colombia Begins Rate Cuts as Growth Worries Overshadow Inflation.

COLOMBIA; PERU

Colombia has cut its interest rates by 25 basis points, marking its first rate cut in three years. The decision comes as concerns about the country's faltering economy outweigh worries about inflation. Colombia joins other Latin American economies, including Brazil, Chile, and Peru, in easing monetary policy as inflation slows and economic activity cools. While annual inflation in Colombia has eased to 10.15% in November, it remains higher than in most Latin American countries and above the 3% target. The country's economy unexpectedly contracted by 0.3% in the third quarter, and indicators suggest continued struggles in the fourth quarter. The rate cut follows pressure from President Gustavo Petro to boost the economy, and the finance minister's argument for lower interest rates to promote growth. The central bank is also monitoring the effects of the El Nino weather phenomenon and the potential impacts of next year's minimum wage increase. [Extracted from the article]

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