Preguntas frecuentes

The Constitution eliminated the Bank’s role as a development bank and strengthened its function as a monetary authority. It established that the Bank cannot grant credit quotas or guarantees to private parties; that it may only finance the State with the unanimous approval of the Board of Directors; and that its primary objective is to preserve the purchasing power of the currency.

As a result, development banking activities were transferred to the Executive branch, which increased transparency in the system. Development funds were assigned to specialized institutions such as Finagro, Banco Agrario, and Bancóldex, while Banco de la República was able to concentrate on controlling inflation under the inflation-targeting framework.

Beginning in 1978, the Monetary Board created mandatory investments that required financial institutions to allocate part of the resources they raised (such as those obtained through certificates of deposit (CDs) to financing the development funds. Although this reduced the inflationary impact, it also generated distortions: it reduced returns for savers, increased interest rates on ordinary loans, and raised borrowing costs for credit users. Problems of transparency and efficiency in the allocation of public resources also persisted.

This role began to be formalized with Decree 756 of 1951, which granted the Bank the power to establish special quotas for development credit to different sectors of the economy. Later, in 1963, the Monetary Board assumed responsibility for defining the rediscount funds, their sources of financing, the sectors to be supported, and the financial conditions of the loans.

Because at that time, the prevailing view was that the State should actively intervene to encourage economic development. From this perspective—before fully understanding the costs and risks of such strategies—central banks were expected to direct savings toward strategic sectors through loans granted on preferential terms, aiming to accelerate economic growth.

As of December 31, 2025, net foreign reserves amounted to USD 66.3 billion. Banco de la República will transfer to the National Government in March approximately COP 13.9 trillion pesos in profits generated during its operations in 2025.

Foreign reserves play a fundamental role in the economy, and their main function is to protect the country when difficulties arise in accessing the foreign currency Colombia needs to make payments abroad. They function as a backup, allowing Colombia to meet its obligations (for example, imports or foreign-currency debts) and to generate international market confidence, facilitating access to credit and foreign investment.

The profits are the product of returns on foreign reserves, among other sources, including returns on public securities held by the Bank and interest that the Bank charges financial intermediaries for liquidity supply operations. The management of foreign reserves consists of investing them following the principles of security, liquidity, and profitability. Most of the reserves are invested in highly safe and easily sellable financial assets, such as government bonds and securities issued by government-related entities that are economically sound.

Foreign reserves are the country’s holdings of strong foreign currencies (such as US dollars, euros, and others) that are managed by Banco de la República.

It depends. When inflation increases due to excess demand from households and companies, there is no conflict. Closing the output and inflation gaps relative to the target requires raising central bank interest rates (benchmark rates) to cool the economy. In this case, monetary policy is said to operate countercyclically. In contrast, when inflation rises due to supply shocks —for example, when food prices rise sharply due to climatic factors such as droughts or in production costs through significant increases in the exchange rate or wages— the central bank must raise its interest rates so inflation can converge back to the target, even if there is no excess demand in the economy. In such a situation, monetary policy might not be deemed as countercyclical.

When inflation is close to the target and demand is expected to exceed potential output, in turn generating upward price pressures, Banco de la República anticipates the situation by increasing the interest rate to avoid the economy’s overheating, circumvent most inflationary pressures, and stabilize GDP growth in a manner proportionate to its potential. On the other hand, when an expected contraction in demand is foreseen, and the output level falls below its potential, Banco de la República preemptively reduces the interest rate.

Banco de la República began to publish inflation targets with the enactment of Law 31 of 1992. Although inflation targets were not met during the first few years, they did guide annual inflation towards a downward trajectory. Since 1999, the targets have been met more consistently and, despite the inflationary shocks experienced between 2000 and 2020, inflation has always converged to the target. In the context of recent inflationary shocks, the Board of Directors of Banco de la República remains committed to bringing inflation to the target. All of the above demonstrates the effectiveness of the target inflation framework and the anchor role that the target fulfills.

The inflation target is the quantitative objective set by Banco de la República to comply with the constitutional mandate of preserving the purchasing power of money through low and stable inflation. When the target is credible, it becomes an inflation anchor around which inflation expectations will revolve. This implies that the price adjustments economic agents make according to their inflation expectations will be in line with the target, thereby contributing to its fulfillment.

It is the general framework under which monetary policy operates in Colombia. Banco de la República makes interest rate decisions with the intent of bringing inflation to the target and contributing to maintaining economic activity (the economy’s output) close to its potential level (the level of production when the economy operates at full capacity).

1. Questions related to the coin exchange

Where can the public purchase the commemorative coin of the 100th anniversary of Banco de la República?

The commemorative coin will be available to the public as of Monday, 27 November 2023 and may be purchased at the twenty-nine (29) Banco de la República’s branches throughout the country, upon appointment request on the website of Banco de la República.

It has a face value of COP 20,000, is of legal tender, and may be used for any monetary transaction for the equivalent of its face value. The coin is delivered in a cloth pouch with a folding leaflet containing information about its features.

The coin in a special case (optional) has a value of COP 37,000.

Why can’t I exchange the coin virtually and have it delivered to my address?

Commemorative coins are securities on which there is a restriction on sending them by courier service. Banco de la República is exploring alternatives so that they can be acquired through the website and can be sent to the user's place of residence.

Why can’t a minor exchange the coin?

The Treasury Department’s current regulations establish as a requirement for cash exchange transactions at the Treasury counters the identification of the user through his/her citizenship card or first-time or duplicate ID. This means that minors are not allowed to carry out this type of transaction, including the purchase of commemorative coins.

2. Questions related to the design, production, or the reason why Banco de la República issues commemorative coins

Why does Banco de la República mint a commemorative coin of its 100th anniversary?

In compliance with Article 3 of Law 2282 of 05 January 2023, the minting of a commemorative coin to commemorate the 100th anniversary of Banco de la República is authorized.

What elements are found on the obverse and reverse of the commemorative coin of the 100th anniversary of Banco de la República?

The obverse shows a female figure representing an allegory of the Republic, adopted initially as such in France around 1792 and welcomed since the 19th century by other countries, including Spain, Argentina, and Brazil. It has received the name "Mariana," a combination of Marie, mother of Jesus, and Anne, mother of Mary, and it is known that it was a very common and popular female name in revolutionary France. Her original headdress, a Phrygian cap, was later replaced by a diadem, and since the 19th century, it has also been an allegory of liberty. Mariana as an allegory of the Republic has been used in the logo of Banco de la República since 1923, the year of its foundation. On the right, in a semicircle, appears the caption "CIEN AÑOS DEL BANCO DE LA REPÚBLICA" (one hundred years of BBanco de la República) and the years "1923" and "2023."

In turn, the reverse has a map of Colombia with the caption "100 AÑOS Generando confianza" (100 YEARS Building trust), the slogan adopted to celebrate the centenary of the institution. The map is surrounded by two circular stripes seeking to evoke, through various symbols, both the built trust by the institution and the management and preservation of cultural heritage. At the same time, it includes horizontally balanced geometric elements that represent stability and institutional soundness.

It is also inscribed with the following elements: i) the words “REPÚBLICA DE COLOMBIA” (REPUBLIC OF COLOMBIA); ii) “2023,” the mintage year; iii) the denomination of “20.000 PESOS” (COP 20,000); iv) a latent image as a security feature that, depending on the angle from which it is viewed, will reflect the initials "BR" (which stands for Banco de la República) or the Arabic numeral "20," and v) the number 20 in Braille.

What are the features or technical specifications of the coin?

The coin of the 100th anniversary of Banco de la República has a face value of COP 20,000, and 500,000 pieces were minted. The coin is made of an alloy composed of 75% +/- 2 copper, 5.0% +/- 2 nickel, and 20% +/- 2 zinc, yellow alpacca. Its diameter is 32 mm (± 0.1 mm), has an average weight of 18.34 g (± 3.0%), and will have a reeded edge.

Who manufactures the commemorative coins for the 100th anniversary of Banco de la República?

The design was made by the Department of Communication and Economic Education of Banco de la República. In turn, the coins were manufactured by the Mint in Ibagué.

An inflation-targeting framework means that Banco de la República makes decisions regarding the policy interest rate to ensure that inflation approaches the target and the economy operates at a sustainable pace over time.

Colombia’s inflation target is 3.0%. It has been set at this level since 2009 and it is the same in countries such as Chile, Mexico, Brazil, Costa Rica, China, Hungary, the Philippines, and Georgia. It is also very close to the targets of Australia, Indonesia, Iceland, Malaysia, Poland, and Romania, which set it at 2.5%, as well as India, Paraguay, and Russia, at 4.0%.

The Bank compares both observed and expected inflation with the target and assesses the current and projected state of economic activity. If inflation (observed or expected) is above the target because economic spending exceeds productive capacity, the Bank must raise the policy interest rate so that inflation returns to the target. Inflation can also exceed the target due to factors that, although transitory, such as a drought, cause more persistent price pressures. In this case, the Bank must also increase the policy interest rate to bring inflation back to the target.

When inflation is high, money quickly loses its value; this means that a household can buy fewer basic goods such as food with the same amount of money. When inflation is both high and volatile, it becomes difficult to finance long-term projects, such as those required to expand companies’ productive capacity or to purchase a house.

The inflation target is the quantitative objective set by Banco de la República to fulfill its constitutional mandate of preserving the purchasing power of money through low and stable inflation. The Bank sets a target to keep inflation close to that level and to guide its decisions regarding the policy interest rate. It is also set so that the public is aware of it, can anticipate the Bank’s actions, and make consumption, investment, pricing, and wage decisions consistent with this target. Additionally, by having a pre-established target, the Bank can compare it with observed inflation at any given time and explain its decisions to the public.

The interest rate on government bonds and their risk premium component have risen, while the policy interest rate has decreased or remained unchanged. Given this, the recent increase in the 10-year government bond interest rate is related to the risk premium for the risk of these bonds, due to the increase in public debt, and not to the performance of Banco de la República’s policy interest rate.