Global inflation and interest rates remained elevated amid a more cautious stance by central banks.Inflation rebounded in major developed economies and remained above their central banks’ targets.Markets revised their interest rate expectations upward.Capital flows to emerging economies weakened…
Vargas-Herrera, Hernando
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- Publicación |Deteriorations in public debt and in the expected fiscal deficit generate statistically significant increases in the cyclical component of the long-term real interest rate and a steepening of the yield curve.
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In recent discussions about Colombia’s macroeconomic environment, the weakening relationship between Banco de la República’s (the Central Bank of Colombia) monetary policy rate (MPR, or the benchmark policy rate) and market interest rates has received comparatively little attention. Indeed, in…
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A common feature of modern central banks is their independence from the government. This autonomy is justified because the goals of the government and the central bank can differ. Typically, governments prioritize short-term growth and therefore favor low interest rates to boost demand and ease…
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According to the prevailing view in Latin America of the mid-20th century—which saw active state intervention as essential for promoting development—central banks were assigned a significant role as development banks. On this basis, they were expected to direct part of domestic savings under…
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Each year, Banco de la República (the Central bank of Colombia) generates profits that, by law, must be transferred to the Government once the equity reserves in this same law have been deducted. In March of this year, Banco de la República will transfer to the National Government approximately…
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Recent installments of this Blog introduced crucial elements of monetary policy, such as the inflation target and the…
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In Latin America, inflation remained above central banks’ inflation targets in most economies, and monetary policy decisions were mixed. In Colombia, Banco de la República (the Central Bank of Colombia, BanRep) maintained its monetary policy rate (MPR) at 9.25%, while the Colombian peso (COP)…
- Publicación |Evidence shows that the transmission of global shocks to domestic financial conditions was significantly stronger during the period of high foreign participation (2014–2022) and weakened after 2023 as foreign holdings declined.
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Inflation is the generalized and sustained increase in the prices of goods and services. When inflation is high, money loses its value rapidly, which affects all sectors of the economy, especially households, as their purchasing power declines. This means that with the same amount of money, a…
- Publicación |The international environment was characterized by lower interest rates in the U.S.
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Banco de la República’s policy interest rate is currently 9.25%. The policy interest rate serves as the benchmark that the Bank uses to lend to or borrow from commercial banks over very short terms. As with other central banks worldwide, it is the main policy instrument used to achieve the…
- Publicación |The international environment remained characterized by high uncertainty, although with signs of economic resilience.Global financial markets began the second quarter of 2025 (2Q25) amid trade tensions driven by new policy announcements by the United States.
- Publicación |"This document illustrates how changes in the risk composition of the portfolio amplified the transmission of monetary policy to average loan interest rates throughout the credit cycle and demonstrates the value of disaggregated data for understanding the macro-financial conditions of the economy."
- Publicación |Global growth expectations were revised downward, particularly for the US and its major trading partners, due to a deterioration in the external environment and increasing trade tensions.The adjustment in projections for developed economies reflects the uncertainty generated from trade policy…
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Global economy proved resilient during the period analyzed, although with some differences among major economies.
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The global economy proved resilient during the period analyzed, although signs of a slowdown emerged towards the end of the quarter.
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Inflation indicators surpassed expectations, staying above the targets set by most central banks.
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Inflation indicators remain above the target of most central banks despite continuing to show a decline in most countries.
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Despite significant declines in 2023, inflation indicators remain above the target of most central banks.
