Following the Banco de la República's decision to maintain interest rates at 9.25%, President Gustavo Petro accused the bank of favoring financial interests over progressive economics and workers, claiming the policy effectively raises real rates amid falling inflation.
In response to the Central Bank's Board of Directors' vote on December 19 to keep the policy rate unchanged at 9.25%—marking eight months without adjustments—President Gustavo Petro criticized the decision on his X account. He argued that falling inflation has led to a real increase in borrowing costs, despite no nominal hike. "The Bank says it doesn't raise the rate, but that's not true: what rises is the real interest rate, because inflation fell," Petro stated. He warned that this restrictive stance could strengthen the peso and stifle growth, contrasting with impending cuts in the US and UK.
Central Bank manager Leonardo Villar defended the decision, citing inflation's distance from the 3% target. "As long as inflation remains away from the target range, monetary policy must remain restrictive," Villar said.
Petro escalated by questioning the bank's independence: "The Central Bank is independent, but only from progressive economics and workers; it depends on the interests of the owners of financial capital." He reflected on a past error in accepting a board nominee from former Finance Minister José Antonio Ocampo, noting, "I naively accepted. I thought he was progressive. Today I could have the majority of the board on the side of the working people."
