Finance Minister Germán Ávila walked out of a central bank board meeting, accusing it of going against Colombia’s national interests and deepening institutional tensions.

Colombia’s Finance Minister Germán Ávila abandoned a meeting of the board of the central bank (Banco de la República), on April 1 in protest over two decisions by the institution: the release of an internal document without prior consultation, and a 100-basis-point increase in the benchmark interest rate, which was raised to 11.25%.

According to the finance minister, the disclosure of the document, which involved both institutions and was linked to a draft government decree, constituted an “abuse.”

He also described the rate hike, the second so far this year, as “irresponsible and inconvenient,” arguing that it contradicts the government’s economic growth strategy.

The central bank said the decision was approved by a majority of its board: “four members voted in favor of the increase, two supported a 50-basis-point cut, and one proposed keeping the rate unchanged.”

The bank justified the move by noting that inflation stood at 5.4% in January and 5.3% in February, above the 5.1% recorded at the end of 2025. It also warned of external risks, including the impact of the conflict in Iran on the global economy, which could increase the cost of key imports such as gas and fertilizers and add to inflationary pressures later this year.

It remains unclear whether Ávila’s withdrawal from the board will be temporary or permanent, but the episode marks a new point of institutional tension that could influence the direction of monetary policy in Colombia in the coming months.

Clash between monetary policy and government strategy

Ávila criticized the decision, saying the central bank is overlooking the country’s economic progress. “The decision taken by the central bank is repetitive and continues to ignore the national government’s efforts to ensure fiscal stability and sustained economic growth,” he said.

He also argued that the increase is disproportionate compared with global trends. “There is not a single economy in the world proposing a 200-basis-point increase in the benchmark rate in the current global context,” he said, referring to the fact that the bank had already raised rates by 100 basis points in February, meaning a total increase of 200 basis points in just four months.

The government maintains that macroeconomic conditions remain stable, pointing to controlled inflation, a relatively stable Colombian peso (COP) against the dollar, declining unemployment and solid productive growth, and argues that tighter monetary policy is unnecessary.

Debate over central bank independence

The Finance Ministry said the minister’s decision to leave the meeting does not seek to challenge the independence of the central bank, but rather to highlight the need for its decisions to align with the country’s economic and social reality.

However, the move has raised legal and institutional concerns. Central bank chairman of the board, Leonardo Villar noted that the finance minister has a constitutional obligation to attend board meetings, as he “not only represents the government but also lead the meetings” said in a public interview broadcasted by media outlet like La República.

He warned that an indefinite absence could amount to a breach of legal duties and urged President Gustavo Petro to appoint an “ad hoc” delegate if the minister decides not to attend future meetings.

Experts say the minister’s absence could affect the board’s ability to make decisions. According to Andrés Pardo, former deputy finance minister and head of Latin America macro strategy at XP Investments, in an interview with Valora Analitik, “current regulations require at least five members, including the finance minister or a delegate, for the board to deliberate and decide”.

This could mean that, without his presence, the central bank may be legally unable to adopt monetary policy decisions.

Economic impact

The rate increase could have significant effects on the real economy. According to the Finance Ministry, a move of this magnitude could slow economic recovery, increase borrowing costs for households and businesses, and raise debt servicing costs.

Small and medium-sized companies, construction, retail and tourism are expected to be among the most affected sectors, along with households holding variable-rate loans.

Lower-income groups could face the greatest impact, as reduced purchasing power and tighter access to credit may deepen economic inequality.

Colombia’s unemployment rate dropped to 9.2% in February from 10.3% a year earlier, marking the lowest level for the month since 2001, according to official data.

In February 2026, Colombia’s unemployment rate stood at 9.2%, a decrease of 1.1 percentage points compared with the same month in 2025 and the lowest figure for a February since 2001, according to the government through the National Administrative Department of Statistics (DANE).

According to the report, “at the national level, the employed population increased by 624,000 people compared with the previous year.” The sectors that contributed most to job creation were professional, scientific and technical activities, with 250,000 new positions, and the public sector (administration, education and health), with 244,000. In contrast, agriculture lost 363,000 jobs and the transportation sector 86,000 compared with February 2025.

President Gustavo Petro highlighted the result on his X account, stating that “we return to a single-digit unemployment rate, 9.2%, the lowest since 2018. More reasons not to accept the mistake of the right parties in claiming that raising the minimum wage to a living wage would bring an employment catastrophe. That was not true: we have the lowest unemployment of this century for the month of February.” The president also defended the minimum wage increase, which reached 23.7%, the highest recorded in the country.

Volvemos a un dígito de tasa de desocupación, 9,2%, la más baja desde el 2018.

Más razones para no aceptar la equivocación de la derecha al afirmar que el subir el salario mínimo al nivel del salario vital traería una catástrofe del empleo.

No fue cierto, tenemos el menor… https://t.co/vXz7Muv3f0 pic.twitter.com/Jx7RBeIWLb

— Gustavo Petro (@petrogustavo) March 30, 2026

Downward trend in unemployment

When analyzing the December–February rolling quarter, the unemployment rate stands at its lowest level in the past ten years, according to DANE reports. The figure rose from an average of 10.7% in 2017–2018 to a peak of 15.7% in 2020–2021, a period marked by the impact of the COVID-19 pandemic, before declining steadily to 9.2% in February 2026.

For the same period in 2025, the rate stood at 10.4%, representing a reduction of more than one percentage point.

These figures are consistent with estimates by the International Labour Organization (ILO) in Colombia, which had projected a gradual decline in unemployment from around 16% in 2020 to an estimated 8.3% for the previous year.

Chart showing unemployment in Colombia from February 2016 to February 2021, including the presidents in office during that period. Image shared by Pacto Histórico Representative David Racero.

Gaps and challenges in the labor market

Despite the overall improvement, the DANE report also highlights challenges in terms of labor inclusion. In February 2026, the unemployment rate for men was 7.4%, while for women it reached 11.7%, representing a gender gap of 4.3 percentage points.

However, the government noted that this gap has been narrowing, as it stood at 5.2 percentage points in the previous month.

The data come from “The Great Integrated Household Survey” (La Gran Ecuesta Integrada de Hogares – GEIH), DANE’s statistical instrument that provides information on the labor market, income, monetary poverty and the sociodemographic characteristics of Colombia’s population.