Colombia Ex-Finance Chief Who Quit Amid Riots Now Central Banker
Colombia Ex-Finance Chief Who Quit Amid Riots Now Central Banker
(Bloomberg) -- Alberto Carrasquilla will join Colombia’s central bank board just four months after nationwide protests over a failed attempt to raise taxes forced him to resign as finance minister.
He was chosen by President Ivan Duque to replace co-director Carolina Soto, who quit last week after her husband confirmed he will run in next year’s presidential elections. Carrasquilla, 62, is seen by investors as a hawkish policy maker, considering his track record as finance chief, who in Colombia also vote in monetary decisions.
An economist with a doctorate degree from University of Illinois Urbana-Champaign, he now returns to the central bank where he was chief economist in the mid-1990s.
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Since the violent street demonstrations that led to his departure from government in May, Colombia has been trying to raise taxes on companies rather than on individuals, to avoid provoking further unrest. Its failure to do this quickly led S&P Global Ratings and Fitch Ratings to cut the nation’s credit rating to junk.
Carrasquilla will join the bank board at a delicate time when it prepares to join other Latin American peers in raising interest rates, perhaps as soon as next month, to curb inflationary pressure. The annual inflation rate is forecast to rise above the upper limit of the 2% to 4% target range this year, while the economy is expected to grow more than 7% after suffering its deepest slump ever last year.
“Carrasquilla arrives at the central bank at a moment in which policy makers are about to begin its policy normalization and most likely will vote in favor of the gradual approach described by governor Leonardo Villar,” Munir Jalil, Andean chief economist at BTG Pactual said in a message.
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