In economics, not all debates are new. Some have already been resolved by evidence, although from time to time they return to the public agenda. One of them is the independence of central banks, which is once again relevant in Colombia. In recent days, the Bank of the Republic has been at the center of the economic debate after increasing the interest rate to 11.25%, in a context in which inflation does not stop.
The minutes of the last board of directors already warned of persistent inflationary pressures, and the most recent figure confirms it. In March 2026, annual inflation in Colombia was 5.56%, above the previous month (5.29%). This confirms a new acceleration of the indicator and shows that pressures on prices are still present in different sectors of the economy.
As is often the case, rising rates open discussions about credit, consumption and investment. But, beyond the short term, it reopens a fundamental question: why does the independence of the central bank matter so much?
In 2022, the International Monetary Fund published the study ‘Central Bank Independence and Inflation in Latin America-Through the Lens of History’, which, based on a century of evidence in 17 countries, concludes that greater independence is associated with lower, more stable inflations and less prone to extreme episodes. The study shows that countries that strengthened the independence of their central banks achieved sustained reductions in inflation, especially when government financing mechanisms were limited. In contrast, when monetary policy was subordinated to fiscal needs or political pressures, inflation increased and became persistent and costly.
The economic history of Latin America is, to a large extent, the history of that learning. For decades, the loss of autonomy of central banks, particularly when they became financiers of public spending, laid the foundations for inflationary processes that deteriorated real income, savings and confidence. It is no coincidence that price stability was only consolidated in the region starting in the 1990s, after the institutional strengthening of these entities.
The evidence is clear: when the independence of the central bank is protected, an essential condition of economic stability is safeguarded that Colombia should not underestimate.
Colombia was no exception. The IMF report shows that, after the 1992 reform, the country strengthened the independence of its central bank, which resulted in substantial improvements in its institutional autonomy and a sustained reduction in inflation. This change not only allowed prices to be stabilized, but also strengthened the ability to respond to economic shocks, consolidating the credibility of monetary policy.
That framework is especially relevant today. According to the Bank of the Republic, annual inflation in 2025 was 5.1%, still above the 3% goal, while core inflation continues to show signs of persistence. Added to this is a key element: inflation expectations have been adjusted upwards. The thought centers agree on this diagnosis. Fedesarrollo, Anif and other analysts have warned that inflation could remain above the target range through 2026, forcing monetary policy to navigate a complex balance, controlling prices without disproportionately affecting economic activity.
Without a doubt, the independence of the Bank of the Republic is neither a technical matter nor an institutional privilege. It is a necessary condition to protect the purchasing power of Colombians, particularly the most vulnerable. In essence, it is a guarantee of stability.
The evidence is clear: when the independence of the central bank is protected, an essential condition of economic stability is safeguarded that Colombia should not underestimate.
History has already spoken; The question is whether we are willing to listen to it.
* President of Porvenir
