Annual consumer inflation in May was higher than expected and converged faster to 3 percent. Meanwhile, inflation expectations increased compared with the previous month.
Economic growth in the first quarter came in at 6.4 percent and was higher than estimated. Also, figures for 2013 were revised upwards and available information suggests domestic demand, mainly investment, boosted growth. With this new information, increases the chance the economy will move closer to full use of its production capacity in 2014.
Under these circumstances, policymakers considered the current macroeconomic stability and inflation convergence to the long-term target is compatible with an increase in the interest rate. The central bank also said the gradual adjustment of the expansionary monetary policy stance reduces the need for sudden changes in the future, thus ensuring stability.
The Board of the central bank also decided to increase the quantity of purchases of international reserves during the third quarter up to 2 billion USD between July and September.