The Banco de la República increased the interest rate by 100 basis points. The decision was made by a majority of 4 to 3 and raised the rate to 6%.
Three members of Banrep’s board of directors voted to increase the rate by 150 basis points.
Among the reasons that were taken into account were: in the month of March, total inflation increased from 8.01% to 8.53%, while inflation without food or regulated items went from 4.11% to 4.51%.
Inflation expectations for 2022 are around 7%. For longer horizons, they converge towards the 3% target, as indicated by the expectations of 4% by the end of 2023 and 3.7% at 24 months.
Economic activity continues to exhibit good dynamism. The technical team revised its growth forecast for 2022 upwards from 4.7% to 5.0%, keeping it at 2.9% for 2023.
The prospects of a faster-than-expected increase in interest rates in the United States and the impact on international prices of Russia’s invasion of Ukraine might generate additional inflationary pressures.
With the decision adopted today, the Board continues with the gradual but firm process of adjusting monetary policy in order to ensure a progressive return of inflation to the 3% annual target.
BRIEFCASE
