Clash over 11.25% rates: Minister withdraws from Central Bank
The decision by the Banco de la República to increase the interest rate by 100 basis points to 11.25% triggered a strong reaction from the Government. The Minister of Finance, Germán Ávila, not only expressed his disagreement but also left the Board of Directors meeting and distanced himself from the monetary policy of the Central Bank.
TL;DR
- The Central Bank raised interest rates by 100 basis points to 11.25%.
- Finance Minister Germán Ávila disagreed with the decision and left the Board of Directors meeting.
- Ávila stated the rate hike contradicts economic reality and affects growth.
- He criticized the decision, citing external factors like the war in Iran and internal issues like the winter wave.
- Ávila questioned the use of analyst surveys, suggesting "cross-interests" influence decisions.
- He announced the Ministry of Finance is distancing itself from the Central Bank.
- Ávila also criticized a Central Bank document regarding pension reform resources as an "abuse."