Colombia Central Bank Chief Sees Risks in Cutting Rates Too Fast.

INTEREST rates; MONETARY policy; ENERGY industries; PRICES; PRICE inflation; CENTRAL banking industry; FOOD prices

Colombia's central bank governor, Leonardo Villar, has warned against cutting interest rates too quickly, as it could lead to the need to reverse course later. The country's high inflation rates have already damaged the bank's credibility, and the El Nino weather phenomenon could further drive up food and energy prices. Traders are divided on whether the bank will accelerate interest rate cuts at its next meeting, with some calling for a larger cut to stimulate weak growth. While Colombian inflation has slowed to a two-year low, it is still above the target rate and higher than neighboring countries. Villar stated that the pace of interest rate cuts will depend on inflation continuing to decrease and the resolution of uncertainties such as El Nino and the recent increase in the minimum wage. [Extracted from the article]

Copyright of Bloomberg.com is the property of Bloomberg, L.P. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)