Evidence from a wide variety of other data corroborated that domestic demand was growing too fast. Excess demand would mean not just inflation but that imports were stimulated to feed a large current account deficit. Thus the rises in our interest rates since April 2006 have been aimed both at containing inflation pressure and keeping our economy on a sustainable path.
I discussed some of the likely channels through which the recent turbulence in international financial markets could come to affect us in Colombia: through international demand for our exports, through changes in terms of trade, and through market interest rates. I also reminded you of the key strengths in our policy framework.