economy
May 9, 2026
Analysis
Households and companies react less and less to monetary policy. Photo: iStock
TL;DR
- Economic uncertainty is weakening the impact of interest rates on the Colombian economy.
- Households and businesses are reacting less to monetary policy changes due to volatility and uncertainty.
- This reduces the central bank's capacity to stimulate or slow down economic activity.
- The effectiveness of monetary policy weakens as the perception of economic risk increases.
- Uncertainty significantly alters the transmission of interest rate decisions to the real economy.
- Consumers and businesses may postpone economic decisions due to a lack of confidence in the future.
- Colombia has seen a growing trend in economic uncertainty indicators in recent years.
- Central banks might need to implement stronger policy movements to offset reduced effectiveness.
- While weakened, monetary policy remains an effective tool for controlling inflation and economic activity, though its effects are slower and less intense.