Colombia’s Central Bank Director Carlos Gustavo Cano said he expects the economy to grow 4.5 percent to 6.5 percent this year, more than the official bank estimate.
Cano, one of the bank’s seven board members, said growth should be sustainable without creating inflationary pressure if the current investment level of 25 percent of gross domestic product is maintained.
The central bank raised its official estimate for gross domestic product expansion last week to 4 percent to 6 percent.
“In my opinion GDP will grow more than 5.5 percent,” Cano said in a presentation on the central bank’s website.
“If we maintain that level in the medium term it will be possible to expect a reduction in the unemployment rate to a single digit, and most importantly an increase in the quality of employment.”
Colombia’s jobless rate was 12.2 percent in March.
Capital controls are useful to limit gains in the peso under “special and transitory circumstances,” Cano said in the presentation.
The peso strengthened to the highest level in almost three years today amid rising investment flows and bets government measures to ease the currency’s rally will fail.
The peso rose as much as 0.7 percent to 1,753.20 per U.S. dollar, its strongest level since July 2008. It ended trading little changed at 1,765 today, from 1,765.25 yesterday.
The peso has jumped 8.1 percent this year, the best performance among six Latin American currencies.
Overseas Fund
As part of measures to ease the peso’s gains, Finance Minister Juan Carlos Echeverry on April 29 announced that the government would create an overseas fund with as much as $1.2 billion from dollars bought in the local spot market through the end of 2011, and would forgo repatriating funds from abroad for the rest of the year.
The government’s dollar purchases come on top of the central bank’s plans to buy a minimum of $20 million daily until at least June 17.
Echeverry told reporters last night he “isn’t happy” about the peso’s strength. Colombia continues to monitor the exchange rate and to discuss more ways to stem gains, he said.
Cano, one of the bank’s seven board members, said growth should be sustainable without creating inflationary pressure if the current investment level of 25 percent of gross domestic product is maintained.
The central bank raised its official estimate for gross domestic product expansion last week to 4 percent to 6 percent.
“In my opinion GDP will grow more than 5.5 percent,” Cano said in a presentation on the central bank’s website.
“If we maintain that level in the medium term it will be possible to expect a reduction in the unemployment rate to a single digit, and most importantly an increase in the quality of employment.”
Colombia’s jobless rate was 12.2 percent in March.
Capital controls are useful to limit gains in the peso under “special and transitory circumstances,” Cano said in the presentation.
The peso strengthened to the highest level in almost three years today amid rising investment flows and bets government measures to ease the currency’s rally will fail.
The peso rose as much as 0.7 percent to 1,753.20 per U.S. dollar, its strongest level since July 2008. It ended trading little changed at 1,765 today, from 1,765.25 yesterday.
The peso has jumped 8.1 percent this year, the best performance among six Latin American currencies.
Overseas Fund
As part of measures to ease the peso’s gains, Finance Minister Juan Carlos Echeverry on April 29 announced that the government would create an overseas fund with as much as $1.2 billion from dollars bought in the local spot market through the end of 2011, and would forgo repatriating funds from abroad for the rest of the year.
The government’s dollar purchases come on top of the central bank’s plans to buy a minimum of $20 million daily until at least June 17.
Echeverry told reporters last night he “isn’t happy” about the peso’s strength. Colombia continues to monitor the exchange rate and to discuss more ways to stem gains, he said.
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