Following its January hike to 10.25%, Colombia's Banco de la República raised its intervention rate by another 100 basis points to 11.25% in a tight 4-3 vote during its second meeting of the year. Finance Minister Germán Ávila walked out of the board meeting and announced the government's withdrawal from the central bank over disagreements. President Gustavo Petro backed the move and criticized the monetary policy.
Following January's rate hike to 10.25%, Colombia's Banco de la República decided to raise the interest rate again to 11.25% on March 31, 2026, citing February inflation at 5.29%, above the 2-4% target range, elevated expectations, and pressures from the Gulf conflict. "The decision to increase the rate is to moderate money issuance and inflationary impact," said manager Leonardo Villar.
Finance Minister Germán Ávila left the meeting early, arguing the move favors financial interests and harms economic recovery. "They are taking irresponsible decisions for the country," Ávila said, calling for a public debate on monetary policy.
Petro backed Ávila on X: "The Government withdraws from the Board. We are not participants in a suicidal opposition stance." He also called appointing Olga Lucía Acosta as co-director his "biggest mistake," as she has been key in resisting rate cuts. Economists like Camilo Pérez praised Acosta for preserving the bank's independence.
Villar defended the central bank's constitutional autonomy: "We act for the country's well-being." Ávila would breach a legal mandate by not attending, per Villar, who hopes for future consensus.
