Colombia: Selected Issues

IMF Staff Country Reports, May 25, 2016

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Colombia: Selected Issues

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Bibliographic details

• Published: May 25, 2016
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484367520.002

Overview and central findings

• Presents an assessment of the monetary policy stance and broad financial conditions in Colombia, providing insights about macro-financial linkages.
• Documents an increase in nonfinancial corporate debt and leverage in recent years, supported by easy access to capital markets, abundant global liquidity, and low interest rates.
• Notes that some sectors look somewhat more strained than others: oil, gas, and airlines.
• Indicates that debt servicing capacity has improved with recent economic growth.
• Identifies three possible drivers of inflation dynamics in Colombia:
  • exchange rate pass-through,
  • the El Niño meteorological phenomenon,
  • wages.
• Reports that the Colombian peso depreciated in line with the decline in oil prices, pushing up tradable-goods inflation.

Analysis of monetary policy and financial conditions

• Assesses the monetary policy stance (monetary policy rate, monetary policy tightening, monetary policy stance) in the context of observed inflation and exchange rate movements.
• Links broad financial conditions to corporate-sector developments and credit dynamics.
• Highlights the role of global liquidity and low interest rates in supporting corporate access to capital markets.

Corporate sector and credit risks

• Documents rising nonfinancial corporate debt and leverage.
• Flags sectoral strain concentrated in oil, gas, and airlines.
• Notes improved debt servicing capacity due to recent economic growth.
• Discusses implications for stress testing and financial sector policy and analysis.

Inflation dynamics and drivers

• Explores exchange rate pass-through as a driver of inflation, with emphasis on tradable-goods inflation.
• Examines the potential impact of the El Niño meteorological phenomenon on prices.
• Considers wages and inflation expectations as another channel affecting inflation.

Publication metadata and subjects

• Publication date: May 25, 2016
• Pages: 52
• Volume: 2016
• Issue: 134
• Series: Country Report No. 2016/134
• DOI: https://doi.org/10.5089/9781484367520.002
• Stock No: 1COLEA2016003
• ISBN: 9781484367520
• ISSN: 1934-7685
• Subjects: Banking, Central bank policy rate, Corporate sector, Credit, Economic sectors, Exchange rate pass-through, Financial sector policy and analysis, Foreign exchange, Inflation, Money, Prices, Stress testing
• Keywords: Corporate sector, CR, Credit, Exchange rate pass-through, financial condition, Global, Inflation, inflation expectation, interest rate, ISCR, monetary policy, monetary policy rate, monetary policy stance, monetary policy tightening, South America, Stress testing, y inflation

Colombia: Selected Issues, IMF Staff Country Reports No. 2016/134 (May 25, 2016).

Content in this bundle

• Colombia: Selected Issues; IMF Country Report 16/134; April 18, 2016
  • Colombia: Selected Issues; IMF Country Report 16/134; April 18, 2016 (Markdown version)
  • Colombia: Selected Issues; IMF Country Report 16/134; April 18, 2016 (PDF)