(Bloomberg) -- The front-runner in polls ahead of Colombia’s presidential election vowed to introduce reforms to the makeup of the central bank, which he claims has lost its independence under recent presidents.
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Gustavo Petro, a senator and former mayor of Bogota who leads polls for the May vote by a wide margin, said the bank’s board is too closely aligned with the political party of sitting President Ivan Duque, the Democratic Center. As a result, he said, it has failed to fulfill its mandate set out by the constitution to increase production and promote social equality as well as fight inflation.
“The board of directors of the bank belong to a political party, the Democratic Center. This is not what the constitution called for,” he said in a debate among candidates Friday evening. “What we want is a central bank that is truly independent, not just from the political powers, but from the financial powers as well.”
If elected, Petro said he would seek reforms to give members of society a presence on the board, particularly representation from “productive organizations” in the country. The bank has lost its independence, he said, under Duque and his two predecessors. Since taking office in 2018, Duque has named six of the seven board members, including the finance minister, after some of the previous members quit and others reached the end of their terms.
Petro has questioned the wisdom of interest-rate increases aimed at quelling inflation, arguing that they kill off Colombia’s economic recovery and hurt production. The bank has raised rates 2.25 percentage points since September to 4% as inflation rose above its target. The bank’s board will meet Feb. 25 but it’s not scheduled to decide on monetary policy.
Colombia holds the first round of presidential elections in May. About 27% of those polled in January said they intend to vote for Petro, more than double the percentage for his closest rival, according to a poll tracker maintained by Colombia Risk Analysis, a consultancy. If no candidate receives more than 50% of the vote, the top two finishers move to a run-off.
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