Bogota: Colombia's central bank raised its benchmark interest rate on Friday for the first time in four months and warned it could adjust monetary policy "rapidly" if the global economic crisis impacted the economy.
While Colombia has benefited from a decrease in drug-funded violence and has attracted record investment in oil and mining, the bank sought to pull monetary stimulus by boosting the lending rate a quarter point to 4.75 per cent.
The decision, which was not unanimous, met forecasts by 18 of 35 economists in the latest Reuters poll. Another 15 had expected policy makers to hold rates steady.
"The biggest risk to inflation comes from excessive increases in demand," said bank chief Jose Dario Uribe after announcing the decision. "The biggest risk to growth forecasts is disorderly adjustments in Europe.
"The new rate provides a better comfort level and helps anchor inflation expectations going into 2012," Interbolsa, Colombia's biggest brokerage, said.
