The Board of Directors mainly took into consideration the following information:
- In May, the average of core inflation indicators (2.92%) remained below the target. Inflation posted at 3.31%. Some supply shocks could raise inflation in the coming months, but it would resume its convergence to the target later.
- Economic growth for the first quarter of 2019 was lower than expected. The new figures suggest that the economy will be more dynamic in the second quarter.
- The prospects for global growth continue to moderate, and in the United States the likelihood that the Fed may reduce its policy interest rate increased.
- The projection of the current account deficit for 2019 continues to stand above 4.0% of GDP, but it will continue to be financed largely by foreign direct investment.
Based on this information, the Board considered the following factors for its decision:
- The temporary deviations of inflation from the target and their persistence.
- Uncertainty regarding the size of the spare capacity of the economy and the speed at which it may reduce.
- The effects of changing external conditions on the Colombian economy.
In this environment, upon assessing the situation of the economy and the risk balance, the Board unanimously decided to maintain the benchmark interest rate unaltered at 4.25%
The Board will continue to carefully monitor the behavior of inflation and the forecasts for economic activity and inflation in the country, as well as the behavior of the balance of payments and the international context. Finally, the Board reiterates that the monetary policy will depend on the availability of new information.