What inflation is, how it is calculated with the CPI and why Banco de la República sets a 3% target
Inflation is a sustained general rise in prices and in Colombia it is measured with the Consumer Price Index (CPI) produced by Dane, with results on the fifth business day of each month. Banco de la República has the mandate to control it through interest rates, currently at 12.25%, and an annual target of 3%, with a range between 2% and 4%. Prices rise when demand exceeds supply or when inputs become more expensive.
In 45 seconds
- Dane's CPI measures monthly, year-to-date and annual variation of a representative basket of goods and services in 38 cities.
- Banco de la República controls inflation with interest rates, currently at 12.25%, and has an annual target of 3% (range of 2% to 4%).
- Prices rise when demand exceeds supply or when inputs and raw materials become more expensive, such as fertilizers or farm output affected by El Niño.
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IASummary generated by artificial intelligence from a story by El Espectador. It may contain errors: the original source prevails.
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