Colombia Lifts Key Rate to 21-Year High Against Petro’s Wish

Colombia’s central bank ignored complaints from President Gustavo Petro and raised interest rates to the highest level in more than two decades, while also deciding against intervention in the currency market, Bloomberg News reported. The bank lifted its benchmark rate by one percentage point to 11%, after the peso plunged and foreign investors dumped the nation’s bonds. The unanimous decision, which was in line with expectations, extends the steepest series of interest rate increases since the bank started inflation targeting at the end of the 1990s. Policymakers struggling to contain the fastest consumer price rises in nearly a quarter of a century are having their task complicated by a drop in the peso amid uncertainty over the policies of the Petro government. The president criticized the central bank this month in a series of tweets, contributing to a sell-off in Colombian assets. Finance Minister Jose Antonio Ocampo told reporters after the meeting that the latest rate increase should help to calm the market. The bank decided against currency intervention after studying liquidity in the futures market and finding it to be normal, he said. Read more.