The Constitution and constitutional jurisprudence assign Banco de la República the specific mission of preserving the currency’s purchasing power. This translates into the objective of achieving and maintaining a low, stable inflation rate, in tandem with general economic policy, while taking into account economic growth.
What does Colombia’s recent experience show about the relationship between inflation, growth and the policy interest rate?
After the pandemic, the economy recovered rapidly, accompanied by higher inflation, which led the Board of Directors of Banco de la República to raise the interest rate to bring it back towards the target. Once inflation began to decline, it began a cycle of interest rate reductions that was interrupted in 2025.
Related BanRep Blog: Balancing Inflation and Growth through the Implementation of Monetary Policy by Banco de la República
Banco de la República is working to bring inflation back to the 3% target while ensuring that the impact of this convergence on economic growth remains as negligible as possible. Keeping inflation low and stable is a fundamental precondition for the economy to grow sustainably over time....
