Banco de la República codirector César Giraldo said raising interest rates is no longer effective against current inflation, which is driven by external factors like oil and weather.
Giraldo, in an interview on May 8 in Bogotá, noted that rates are already at a contractionary level of 11.25 percent without reducing inflation, which hit 5.6 percent annually in March. He said pressures stem from higher oil prices, supply chain disruptions and climate events, beyond monetary policy reach.
The official, aligned with President Gustavo Petro, proposed using other tools like open market operations and currency interventions, alongside government energy subsidies. He acknowledged private consumption has grown from higher salaries and remittances, not excessive debt, though public spending adds pressures amid the fiscal deficit.
Giraldo voted against recent hikes and defended the central bank's autonomy, focusing on debating methods to reach the inflation target.
