Villar defends Banrep's high-rate strategy to anchor inflation before builders
Leonardo Villar, governor of Banco de la República, explained before the Colombian Construction Congress, organized by Camacol in Cartagena, why the institution keeps interest rates high. Villar acknowledged the sector's difficulties with credit costs, but argued that cutting rates with inflation at twice the 3% target could raise price expectations and long-term borrowing rates. He also said the fiscal scenario pressures public debt yields and makes housing financing more expensive.
In 40 seconds
- Villar defended before builders Banrep's strategy of prioritizing inflation control through interest rates since 1999.
- The interest rate stands at 12.25%, after a final 0.25% hike in September, and CPI inflation at 6.29%, against a 3% target.
- The governor warned that a rate cut with inflation at that level could boost price expectations and long-term credit rates.
Read the full story at El Espectador
IASummary generated by artificial intelligence from a story by El Espectador. It may contain errors: the original source prevails.
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