Leonardo Villar, general manager of Banco de la República, and Germán Ávila, finance minister, clashed in a political oversight debate on the fiscal impact of recent interest rate hikes. Villar defended the bank's autonomy and criticized government discrediting. Ávila responded by highlighting his guerrilla past and questioning Colombia's rate increases compared to other countries.
The debate took place on April 15 during political oversight on the fiscal, budgetary, and financial impact of Banco de la República's recent monetary decisions.
Leonardo Villar began by recalling the issuer's mandate to preserve the purchasing power of the currency. "The issuer has a very clear mandate and it is to preserve the purchasing power of the currency," Villar said, noting inflation was 32% when independence was established in 1991. He defended the finance minister's presence on the board as a feature that has worked for 35 years but warned it could become a veto on the bank's autonomy.
Villar rejected discrediting of board members, especially women, and criticized President Gustavo Petro's comments against codirector Laura Moisá, whom he called "Marxist." He explained that in 2025 the rate was cut from 12.75% to 9.25%, but inflation stopped falling, leading to a hike to 11.25% with a 4-3 vote.
Germán Ávila responded proudly: "Doctor Villar, I was proudly a guerrilla, I am an M-19 demobilized." He questioned Colombia raising rates when neither Europe nor the US is doing so, and criticized inflation surveys relying on public debt holders from the financial sector.
Villar rebutted that it is "a lie" codirector Olga Lucía Acosta was a guerrilla and stressed sustainably lowering inflation reduces rates. He recalled Ávila left the March 31 meeting over disagreement on the 100 basis point hike.
