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Colombia central bank cuts key rate to fresh low

BOGOTA: Colombia's central bank said on Friday it was trimming another 136 basis points off its key 90-day fixed term deposit rate, or DTF, and setting it at a record low of 12.15 percent.

It was the 11th consecutive cut in the rate as the central bank struggles to help pull Colombia out of its worst recession this century.

The latest cut was also the fourth since late last month when the International Monetary Fund, which recently granted Colombia a $2.7 billion Extended Fund Facility, warned of the need for "caution" in pursuing any further easing of monetary policy.

The fund said more economic confidence, and a stronger fiscal position in Colombia, were needed if the bank was going to loosen its policy stance any further.

The DTF was slashed more than 50 percent last year, as part of an aggressive bid to put Colombia back on the road toward economic growth.

The rate serves as the bellwether of local financial markets, together with yields on the government's TES treasuries, and it is the guideline by which about 80 percent of commercial interest rates are set.-Reuters