The Colombian economy is showing signs of a progressive cooling, as the inflation rate has dropped significantly compared to previous months. In February 2023, inflation stood at 13.28%, but has now decreased by 5.54 percentage points. The monthly variation also showed a decrease of 0.61% compared to January’s figure of 8.35%.
This drop in inflation could lead the Bank of the Republic to consider reducing interest rates once again. The central bank’s board will meet this month to discuss a possible adjustment in the country’s monetary policy.
The dollar is also experiencing a downward trend, with the currency trading lower in the first minutes of trading on March 8th. The maximum price reached so far is $3,920, while the minimum price is $3,903, with an average price of $3,908. The dollar index, which compares the American currency with other currencies, is also showing a downward trend globally.
Central banks around the world, including the Bank of the Republic in Colombia, the European Central Bank, and the Federal Reserve in the United States, are considering cutting interest rates this year. This comes after several banks increased interest rates in response to high inflation caused by the COVID-19 pandemic.
Federal Reserve Chairman Jerome Powell stated that if the economy continues to evolve as expected, it may be appropriate to ease monetary policy this year. In the United States, inflation is decreasing and approaching the Federal Reserve’s 2% annual target. In Colombia, the inflation target is between 2 and 4%, and there is anticipation of another significant drop in the coming months.