BOGOTA, Sept. 25 (Xinhua) -- Colombia's central bank said on Friday that it has lowered the benchmark interest rate by 0.25 percentage points to 1.75 percent to reactivate the economy amid the COVID-19 pandemic.
"After the relaxation of lockdown measures, a slower rate of deterioration of economic activity has been observed; however, economic activity continues to contract. For this reason, the technical team at the Bank of the Republic estimates that the economy will contract between 6 and 10 percent in 2020," the central bank said in a statement.
The central bank said that in July, there was a slight improvement in the unemployment rate at the national level, but "a marked deterioration in the labor market and in household disposable income" was observed.
"External financial conditions continue to be favorable, and the dynamics of the current account reflect lower external financing needs. Under these conditions, the balance of risk of the monetary policy suggests it is convenient to lower the interest rate," the statement added.