The Board of Directors of the Banco de la República said that the goal set for several years of 3% in terms of inflation would be met, but in 2024.
(Colombia, the second country with the most young people who neither work nor study).
The decision-making body of the Colombian central bank met yesterday but no decision on monetary policy was planned and said that since mid-2021, inflation has moved away from the 3% target and a level above 11% is expected at end 2022.
The board said that inflation at the end of 2023 will be around 7% but that at the end of 2024 it will return to 3%, which is the entity’s long-term goal.
He assured that the increase in inflation is the result of the confluence of multiple phenomena, among which historically high external and internal cost shocks stand out, and dynamic demand levels. Added to this are indexation processes to higher inflation rates and exchange pressures on prices in a context of deteriorating international financial conditions.
(For banks, trust is the axis that guarantees financing).
The Colombian issuer said that the monetary policy actions are aimed at driving inflation to the 3% target, ensuring the sustainability of economic activity.
“The determination of the horizon of convergence towards the goal takes into account the dilemma between a faster reduction of inflation and the short-term costs in terms of output and employment that this could entail,” said the Bank.
In this adverse context, he recalled that “since September 2021, the Board has increased the policy interest rate from 1.75% -a level that at the time it deemed necessary to countercyclically face the recessive challenges of the pandemic- to the current 11% ”.
He ended by saying that the adjustment has been consistent with the objective of bringing inflation to 3%, initially through the normalization of monetary policy and recently with a contractionary stance.
BRIEFCASE
