Why is the policy interest rate in Colombia currently higher than in other countries in the region?

REFERENCES

BanRep’s Blog: Banco de la República’s Policy Interest Rate as a Response to High Inflation

  • Because the gap between observed inflation and the target is higher in Colombia than in other countries in the region.
  • Because the gap between inflation expectations and the target is higher in Colombia than in other countries in the region.
  • Once inflation gets to a low and stable level, the policy interest rate will also be lower.