The interest rate increases in Colombia would be coming to an end, as inflation is expected to slow sharply with the economy set for a hard landing in 2023, he said Leonardo Villar, manager of the Bank of the Republic.
(See: Interests would have a gradual decrease).
The country’s economic authorities have responded to the highest inflation in more than two decades, mainly due to international factors, with a contractionary policy stance, Villar clarified in an interview with the newspaper The viewer.
“I could not say at this time that the rate increase process is overVillar said.What I can say is that we are approaching what could be considered the ceiling of that process.”, he clarified.
(See: Inflation will set the pace for interest rates and the price of the dollar).
The central Banrep raised the reference rate to 12% at its December meeting, which represents an increase of 10.25 percentage points since the cycle of increases began back in 2021.
annual inflation accelerated in November to 12.5%, the highest since 1999.
Regarding the latter, Villar affirmed that inflation should begin to moderate in the coming months, and the higher interest rates should affect the economy “Coming Soon“, Held.
(See: This was the announcement of the last interest rate increase of 2022).
According to the executive, it is forecast that the increases in prices will drop to about 7% by the end of 2023 and they will only reach the bank’s 3% target in two years.
He also stated that economic growth will cool down to about 0.5% in 2023 from an expected expansion of almost 8% for this 2022.
Leonardo Villar, manager of the Bank of the Republic.
Economists surveyed by the central bank expect a final rate hike of 50 basis points at the January meeting to close the cycle at 12.5%.
(See: How long will central banks keep raising rates?).
Bloomberg
