June 7, 2019 / 12:33 AM / a year ago

Colombia finance min says central bank should limit opinions to monetary policy

CARTAGENA, Colombia, June 6 (Reuters) - Colombia’s Finance Minister Alberto Carrasquilla on Thursday said the central bank should limit its opinions to monetary policy in public, after its chief policymaker commented that political polarization could damage the economic performance of the Andean nation.

Carrasquilla’s remarks came in response to comments by central bank chief Juan Jose Echavarria, who last month said polarization could cause uncertainty among consumers, as the right-wing government of President Ivan Duque struggles to pass legislation amid virulent opposition from other parties.

Echavarria also said this week the economy was showing “stagnation.”

“I think it violates a custom of central banks, of best practices of central banks, which is to limit themselves to talking about monetary policy in public and discussing absolutely all the facets of the economy internally, but limiting itself to its constitutional functions,” Carrasquilla said at a banking conference in Cartagena.

“I’m convinced that there’s no polarization in the country, or at least not any that has an effect on the decisions of business people and consumers. I asked (him) what concrete information he has that backs up the hypothesis; he hasn’t given it to me yet and so I think it’s hogwash,” Carrasquilla added.

Powerful ruling party senator and former President Alvaro Uribe made fun of Echavarria’s polarization comments on Twitter.

Carrasquilla, who represents the government on the central bank board, said that even though the economy did not grow as much as expected in the first quarter, it is showing signs of recovery.

He said he was certain the economy would grow around 3.5% this year and that time would prove the government’s predictions right.

Colombia’s economy expanded 2.8% in the first quarter, led by the finance and mining sectors, beating last year’s 2.0% expansion.

Analysts expect the economy to grow 3.25% this year, while the central bank estimates expansion will be 3.5%. (Reporting by Carlos Vargas and Nelson BocanegraWriting by Julia Symmes CobbEditing by Helen Murphy and Cynthia Osterman)

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