Colombia cenbanker sees wider current account deficit, stable rate
BOGOTA, March 5 (Reuters) - Colombia's current account deficit may widen to almost 6 percent of GDP by the end of the year and the benchmark lending rate should remain steady at 4.5 percent, central bank board member Carlos Gustavo Cano said.
In a presentation published on the bank's website late on Wednesday, Cano said the deficit is likely to expand from 5 percent of gross domestic product last year.
"The current account deficit keeps growing," said Cano, one of seven central bank co-directors.
The expectation of smaller cash flows from overseas has helped weaken the currency 25.3 percent in the last 12 months to its lowest level since 2006.
Cano said the key lending rate should remain steady for the remainder of the year, taking advantage of stable inflation as economic growth slows. The bank has maintained borrowing costs at 4.5 percent for six months to help bolster the economy.
"Despite the deceleration of the economy and a return of the output gap to negative territory, the interest rate should remain unaltered during the rest of the year," said Cano.
He sees growth below the bank's estimate of 3.6 percent this year, but said inflation will remain within the target range of 2 percent to 4 percent.
"In my opinion Colombia has grown 4.7 percent in 2014 and will grow between 3 and 3.5 percent in 2015," he said. (Reporting by Nelson Bocanegra; Writing by Helen Murphy; Editing by Meredith Mazzilli)
© Thomson Reuters 2017 All rights reserved.