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Colombia cites low inflation and coal paralysis in cut

Monday, March 11, 2013

Colombia’s economy has no inflationary pressure in the near future, as excess capacity helps keeps prices down, the central bank said in the minutes to its February policy meeting.

Banco de la Republica also cited “paralysis” in the country’s coal industry, and the risk of weaker demand from Venezuela, in its unanimous decision to cut it policy rate a quarter point to 3.75 percent last month.

“The deceleration in inflation, which was greater than expected, takes place in a context of an output gap, which could keep inflation expectations low for a longer period of time,” policy makers said in the minutes.

Source: Bloomberg