The head of Colombia’s central bank said Thursday that the country is prepared to face a backlash from the looming economic crisis in Europe.
In an interview with Caracol Radio, José Dario Uribe affirmed that Colombia has the economic policies at its disposable that will allow it both to withstand developments across the Atlantic and experience GDP growth of around 5 percent.
“We have the appropriate framework of economic policies to confront [the crisis in Europe], a framework that will allow us to adopt an anticyclical monetary policy, as we did in 2008 and 2009, when we lowered the interest rate, injected liquidity into the market, including lowering central bank reserves, and all these types of instruments are available,” said Uribe, adding that the central bank has the possibility to interfere in the exchange rate of the Colombian peso.
Uribe’s words echo recent remarks from Colombian president Juan Manuel Santos, who has urged the nation’s political and economic leaders to prepare for the worst case scenario in a world-wide economic downturn.
Some Colombian economists have expressed support for the government’s recent statements. José Antonio Ocampo, a professor at Columbia University who has served in a number of positions with Colombian government and the UN, expressed belief in the government’s ability to withstand the crisis. In an interview with economic magazine Portofolio, Ocampo stated that the government was free to pursue expansionary monetary and credit policies as a result of its low levels of economic debt.
Such comments come during a time of increased focus on the Colombian peso, which according to a Bloomberg report has increased 8.6 percent against the dollar this year, more than any currency the American financial company tracks. The increase has put added pressure on flower and coffee growers and led some to call for greater central bank intervention.