US EditionColombia Government Withdraws From Central Bank Board, Finance Minister ...
Finance Minister German Avila withdrew from the board over a 100-basis-point rate hike to 11.25%, citing disproportionate impact and lack of policy coherence with Colombia’s social needs.
- On Tuesday, Colombia's Central Bank raised the benchmark interest rate to 11.25%, prompting Finance Minister German Avila to withdraw from the board and call the 100-basis-point increase "disproportionate."
- Avila and President Gustavo Petro have long protested Central Bank rate hikes, arguing rate cuts would better serve the economy and that policymakers prioritize the financial sector over average Colombians.
- The 100-basis-point increase aims to curb annual inflation that reached 5.29% in February, exceeding the Central Bank's long-term 3% target amid rising consumer prices driven by a 23% minimum wage increase.
- Central Bank board chief Leonardo Villar rejected Avila's accusations of self-interest, stating the board is working to return inflation to its 3% target next year and that the withdrawal violates constitutional norms.
- Policymakers face mounting pressures including the 23% minimum wage increase and potential fuel price impacts from the conflict in the Middle East, complicating efforts to control inflation amid the government-bank standoff.
12 Articles
12 Articles
The Bank of the Republic of Colombia approved an increase of 100 basis points in the interest rate, which was set at 11.25 % in the face of inflationary pressures
Colombia Finance Chief Leaves Central Bank Board Over Rate Hikes
Colombia Finance Minister German Avila abruptly left Tuesday’s central bank meeting where officials were widely expected to increase interest rates, saying the government would abandon the board unless “certain conditions” were met.
The war of the government of Gustavo Petro against the majority of the board of directors of the Bank of the Republic climbed this Tuesday to an unknown territory. Germán Ávila, Minister of Finance and member of that board, suddenly withdrew from the room where the meeting was held in which the seven members had to define the reference interest rate for Colombia. He quickly called his own press conference and announced, alone and in front of the…
“As I warned, the board of the Banco de la República continues in its attitude of killing the Colombian economy,” President Gustavo Petro said after the Bank of the Republic increased interest rates by 100 points. The Bank of the Republic supported its decision, which was not unanimous, that inflation expectations continue to rise and, in addition, inflation – excluding regulated products – has also increased. Before the increase was known, Pres…
The Ministry of Finance announced the breakdown of relations with the Bank of the Republic, amid disagreements over the monetary policy decisions adopted by the Board of Directors of the entity. The decision comes after the meeting at which the central bank approved the increase of the interest rate to 11.25 per cent, from which the Minister of Finance, Germán Ávila, withdrew, as a sign of dissatisfaction with the measure. The Government has que…
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