The Central Bank of Colombia increased its benchmark interest rate this Friday by 100 basis points to 4%, more than expected by most of the market, amid growing concerns about the rise in inflation that far exceeds the goal of the monetary authority.
This is the highest level of the interest rate since April 2018.
In a Reuters poll, only two of the 12 analysts consulted anticipated the magnitude of the increase, while 8 expected a rise of 75 basis points and the remaining two estimated a rise of 50 basis points.
The decision had the vote of five of the seven members of the issuing bank’s board of directors.
This is the fourth consecutive increase in the interest rate since the Central Bank began the current upward cycle to contain inflation after a prolonged expansionary monetary policy since the start of the pandemic, as well as greater dynamism in the economy and pressures international prices due to problems in the global supply chain.
The Central Bank raised its inflation forecast for this year to 4.3% from a previous 3.7%, while for 2023 it projected it at 3.4%.