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Benchmark Interest Rate Change
Comparison of interest rate levels following the recent adjustment.
Primary Sources
Colombia Deploys Subsidies After 'Outrageous' Central Bank Move
Colombia's leftist government is rolling out a series of subsidies and cheap loans to limit the economic damage it says will result from the central bank's "outrageous" interest rate policy.
Finance Colombia » Colombia's Finance Minister Leaves Central Bank ...
Finance Minister Germán Ávila walked out of a central bank board meeting, accusing it of going against Colombia’s national interests and deepening institutional tensions. Colombia’s Finance Minister Germán Ávila abandoned a meeting of the board of the central bank (Banco de la República), on April 1 in protest over two decisions by the institution: the release of an internal document without prior consultation, and a 100-basis-point increase in the benchmark interest rate, which was raised to 11.25%. According to the finance minister, the disclosure of the document, which involved both institutions and was linked to a draft government decree, constituted an “abuse.” He also described the rate hike, the second so far this year, as “irresponsible and inconvenient,” arguing that it contradicts the government’s economic growth strategy. The central bank said the decision was approved by a majority of its board: “four members voted in favor of the increase, two supported a 50-basis-point cut, and one proposed keeping the rate unchanged.” The bank justified the move by noting that inflation stood at 5.4% in January and 5.3% in February, above the 5.1% recorded at the end of 2025. It also warned of external risks, including the impact of the conflict in Iran on the global economy, which could increase the cost of key imports such as gas and fertilizers and add to inflationary pressures later this year. It remains unclear whether Ávila’s withdrawal from the board will be temporary or permanent, but the episode marks a new point of institutional tension that could influence the direction of monetary policy in Colombia in the coming months. Clash between monetary policy and government strategy Ávila criticized the decision, saying the central bank is overlooking the country’s economic progress. “The decision taken by the central bank is repetitive and continues to ignore the national government’s efforts to ensure fiscal stability and sustained economic growth,” he said. He also argued that the increase is disproportionate compared with global trends. “There is not a single economy in the world proposing a 200-basis-point increase in the benchmark rate in the current global context,” he said, referring to the fact that the bank had already raised rates by 100 basis points in February, meaning a total increase of 200 basis points in just four months. The government maintains that macroeconomic conditions remain stable, pointing to controlled inflation, a relatively s...
COLOMBIA | President Petro and former Finance Minister Ocampo trade ...
Latinometrics (@LatamData). 20 likes. COLOMBIA | President Petro and former Finance Minister Ocampo trade accusations over a $19.1B fuel subsidy deficit after the government breaks formal communication with the Central Bank. (La República)
Colombia's Inflation Conundrum: Revisiting Central Bank Targets
Colombia's Finance Minister German Avila suggests reevaluating the central bank's 3% inflation target after a controversial interest rate hike. The central bank increased rates to 11.25%, sparking debate among policymakers. Avila asserts the economy can support higher inflation, emphasizing the need for coherence between policy decisions and economic reality.
