mar - 08 14 - mar - 08 29 - feb - 08 15 - feb - 08 01 - feb - 08 18 - ene - 08 04 - ene - 08 19 - dic - 08 05 - dic - 08 21 - nov - 08 real growth of the deposits in the financial system * deposit real growth rates 07 - nov - 08 chart 8 basis points chart 7 spread between the average deposit interest rate and the policy rate - 140 - 160 - 180 - 200 - 220 - 240 - 260 - 280 - 300 * deflated by cpi ex - food credit growth remained strong even for foreign - owned banks ( chart 9 ), which work as subsidiaries in colombia and are subject to the same regulatory framework as domestic banks. however, lending interest rate spreads did rise in october 2008 thus reflecting a larger risk premium, especially for prime and corporate treasury loans ( chart 10 ). our financial system survey showed tightening local credit conditions in the fourth quarter ( chart 11 ) and both firms and banks reported anecdotal evidence regarding more expensive credit with shorter maturities. interestingly, throughout 2009 the behavior of foreign and domestic banks in the local loan market has diverged. foreign banks have drastically cut their exposure to consumer credit while domestic banks have kept high rates of growth of loans ( chart 9 ). at the same time the external credit lines available to the colombian banks were reduced and their cost raised ( chart 12 ). nonetheless, the use of those lines remained below the approved amounts and declined along with them ( chart 13 ). this reflected, among other things, a dramatic fall in the demand for funding linked to international trade ( chart 14 ). chart 9 real growth of the colombian financial system loans 25, 0 % 20, 0 % % 15, 0 % 10, 0 % 5, 0 % 0, 0 % local banks foreign banks 4 / 08 / 2009 4 / 07 / 2009 4 / 06 / 2009 4 / 05 / 2009 4 / 04 / 2009 4 / 03 / 2009 4 / 02 / 2009 4 / 01 / 2009 4 / 12 / 2008 4 / 11 / 2008 4 / 10 / 2008 4 / 09 / 2008 4 / 08 / 2008 4 / 07 / 2008 4 / 06 / 2008 4 / 05 / 2008 4 / 04 / 2008 4 / 03 / 2008 4 / 02 / 2008 4 / 01 / 2008 - 5, 0 % total * deflated by cpi ex - food chart 10 lending - deposit interest rate spreads basis points average lending rate - deposit rate

only a portion of this increase is due to temporary agricultural supply conditions attributed to el nino weather. demand shocks that threatened persistent hikes in future inflation and imbalances that can jeopardize the sustainability of economic growth have been responsible for the rest. other evidence revealed an excess of demand above supply in colombia, which, although moderate, is still visible. the various statistical techniques used to analyze the difference between actual and potential output ( the gdp gap ) all suggest the former exceeds the latter by somewhere between 1 to 2. 5 percentage points. most of the capacity indicators are close to historically high levels. another very straightforward piece of evidence is by how much our current gdp growth rates lie above historical averages. this year, the annual growth rate during the first semester was 7. 6 %, which is the highest for the first 6 months of a year since we have had quarterly data at our disposal. a situation where economic growth surpasses its historic average and the gdp gap that keeps positive represents a serious risk of inflation. this demand pressure is also visible in our imports. nominal imports in dollars have increased at an average annual rate of 34 % since 2006. this is much higher than the 7. 7 % average growth observed since 1994. nominal exports in dollars have soared as well, but less than imports. this means the current account deficit has risen every quarter since 2006. in summary, our challenge in the second half of 2006 and the first of 2007 was to deal with inflationary demand. since april 2006, our monetary policy response has been to raise the banco de la republica ’ s intervention interest rates by 325 basis points. as of may 2007, these hikes have been supplemented with a 24 % average marginal reserve requirement on liabilities in the banking system. what i want to emphasize is that in situations such as the job of keeping inflation close to a well – defined target is the same as keeping growth on a sustainable path. there was no trade - off. the growth rate of 11 % in domestic demand during the first quarter of 2007 was too high. had we let demand continue to grow at high rates, it would have meant not only excess inflation, but a worsening - quality and more risky investment, as well as an unsustainable current account deficit. let me also assure you that my colleagues and i at banco de la republica and in other areas of the government are very much aware that for growth to bring lasting benefits, it must be sustainable. we have public