The objective of monetary policy in Colombia is to maintain a low and stable inflation rate and to attain a maximum sustainable level of output and employment. To achieve its objectives, the Central Bank of Colombia follows an inflation targeting strategy in a flexible exchange-rate regime. Monetary policy actions aim for future inflation to stand at the target set out in the policy horizon. The target was set at 3.0% (with a deviation range of ±1 percentage point). With the purpose of achieving the inflation target, the Central Bank sets the benchmark interest rate, also known as the monetary policy interest rate or intervention rate. The Bank adjusts the money supply to ensure that the overnight Reference Banking Indicator (IBR) is close to the monetary policy interest rate.
