Colombia central bank co-director Mauricio Villamizar said on Tuesday policy
rates may need to rise further and remain higher for longer to curb rising
inflation risks. Speaking at the IMF annual meeting in Bangkok, Villamizar cited
El Nifio, the Iran war and a large fiscal deficit as upside price pressures,
saying El Nifio’s hit to food and energy could exceed market expectations and
push the country into "unknown territory." He said the bank expects rates to
stay elevated for an extended period but that further hikes are on the table if
necessary. The remarks follow a surprise rate increase last month that pushed
rates to their highest level so far in 2024 as the central bank seeks to rebuild
policy credibility after years of missing inflation targets.
