Banco de la República maintains the benchmark interest rate at 4.25%.

The Board of Directors of Banco de la República, in its meeting today, decided to maintain the benchmark interest rate at 4.25% For this decision, the Board mainly took into account the following aspects:

• In December, yearly consumer inflation and the average of core inflation indicators decreased, reaching 3.18% and 3.03%, respectively.
• Inflation expectations recorded slight changes and remain above 3.0%. To horizons greater than or equal to one year, analysts’ expectations and those embedded in public debt bonds are between 3.3% and 3.5%.
• The prospects for global growth continue moderating. The Fed kept its reference interest rate unaltered. For 2019, in the United States, a path of interest rates lower than in the last quarter is expected. 
• So far this month, the international price of oil increased, but remained below the average observed in 2018. In the same period, the country's risk premia lowered, and the peso appreciated vis-à-vis the US dollar.
• The latest figures available suggest that in 2018 economic growth, estimated by the technical staff at 2.6%, continued. Household consumption accelerated, mainly by higher spending on durable goods. Higher imports of machinery and equipment suggest recovery of investment.
• The Board of Directors expects a growth figure close to 3.5% for 2019. This estimate assumes a positive effect of the Financing Law on output, and considers the lower paths expected for oil prices and for the average growth of the country's trading partners.
• For 2019, a current account deficit as a share of GDP higher than in 2018 is projected.

Based on this information, the Board considered the following factors for its decision:

• The dynamics of the economic activity and uncertainty over its pace of recovery.
• Observed inflation, its expected convergence to the 3.0% target, and the risks associated to it.
• The current, moderately expansionary monetary policy stance.
• The effects of the changing external conditions on the Colombian economy.

In this environment, upon assessing the economic situation and the risk balance, the Board deemed appropriate to maintain the benchmark interest rate 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 international context. Finally, the Board reiterates that the monetary policy will depend on the availability of new information.

The decision to maintain the benchmark interest rate unaltered was approved unanimously by the Board.

Bogotá,