The Banco de la República, Colombia’s central bank, has increased interest rates, adopting a rise of 25 basis points, up to 13%.
The central body has indicated that monetary policy is approaching its ceiling, from which the decline expected for 2023 would begin.
In the month of December, year-on-year inflation in Colombia rose to 13.2%, while food prices have fallen since the end of 2022, although they are still above 24% year-on-year.
As the bank’s general manager, Leonardo Villar, has pointed out, the expectation is that Colombia will face a disinflationary phase during 2023, although it will be above the 3% target by the end of the year.
“Inflation was out of the acceptable and desirable range, both in Colombia and in the rest of the world. It is difficult to lower the figure immediately to the goal in 2023, but we are confident that we will reach this figure by the end of 2024 ”, he pointed out.
This latest increase by Banco de la República is less aggressive than the one carried out by the entity in January, which was 75 basis points, reaching 12.75%, and much lower than the previous one of 100 basis points executed in the month of December.
The bank has also ruled on the financial stability problems that have recently been experienced in the United States, focusing on the greater “uncertainty” and “volatility” that this scenario has brought, although its impact would be limited on the Colombian economy.