* Colombia’s central bank (Banrep) has reduced its benchmark interest rate by 25 basis points, from 2.25% to a historic low of 2%, to support the recovery of the country’s economy,
hit hard by the coronavirus (Covid-19) pandemic. This is the sixth consecutive month in which the interest rate has been cut, down from 4.25% in March. Banrep manager
Juan José Echavarría claimed that there is a clear need to “
provide an additional boost to the economy”, citing “
weak aggregate demand”, “
excess production capacity”, “
the deterioration of the labour market”, and “
lower inflation”. Echavarría also noted, however, that the bank’s technical team expects interest rates to rise again in 2021.
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