Colombia’s central bank trimmed the benchmark interest rate a quarter point to 7.25 per cent on Friday, in a surprise move.

The monetary policy committee of Latin America’s fourth-largest economy continues to wrestle with inflation above its target range and depressed prices of oil, its top export and source of foreign currency.

Earlier this week, Colombia saw its economy growing a better-than-expected 1.6 per cent for the fourth quarter, versus a year ago, and 2 per cent for the full 2016. This was down from a 3.1 per cent in 2015, but as Rupert Stebbings, managing director of equities at Bancolombia in Medellín, said in a note early on Friday:

2 per cent is a decent return especially looking around the region – it may not be China circa 2008 but it will do – we are looking for 2.3 per cent for 2017.

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