FNC voices support for Colombia’s move to cut interest rates

Colombian Coffee Growers Federation (FNC) CEO Luis Genaro Munoz Ortega expressed his support for the Colombian government's change in monetary stance.  In a statement released on 4 September, Ortega said the FNC supported the Central Bank of Colombia's decision to reduce interest rates.  “The Federation supports the measures proposed by the Government to maintain confidence in Colombia in the midst of the international crisis,” Ortega said in an editorial letter. The Central Bank of Colombia first announced in late July a “change in monetary stance” when it chose to cut interest rates by 25 basis points. The reduction was followed by a second rate cut in late August. According to the minutes of the central bank's Board of Directors from 27 July, the initial decision was based largely on weakened worldwide economic growth, as well as recent moderation of inflationary pressures.   “The weakening of [the] global economy is negatively affecting Colombian growth as a result of less external demand and lower international prices of its major export products,” the minutes states. Coffee represents an important part of the Colombian economy, with around 560,000 families dependant on coffee for their income.  Ortega addressed how the rise of the Colombian peso, which is now South America's most appreciated currency, has taken away from competitiveness from coffee as an export.  “Since 2009 and to date the Colombian peso has revaluated about 20 per cent,” he said. “Which means, in equal proportion, less income for the 560,000 coffee families.”