Source: DANE - CPI
On the other hand, the monetary policy intervention rate is the minimum interest rate that the Central Bank charges financial entities for the loans it makes to them. This rate is the main monetary policy intervention mechanism used by central banks to control inflation. As can be seen in Graph 4, the interest rate has a tendency to react later to inflationary peaks, so it is expected that, if 12-month inflation is not controlled, interest rates will continue to rise to control the increase in prices.
Graph 4. Relationship between the Banco de la República interest rate and 12-month inflation
