(Bloomberg) -- Colombian President Gustavo Petro named two academics to the nation’s central bank, potentially changing the balance of forces on a board which is split over how fast to cut interest rates.
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Petro said in a post on X that he had appointed Laura Moisa and Cesar Giraldo as central bank co-directors.
Moisa is an economics professor and deputy rector of Colombia’s National University in Medellin. Her research interests include development, rural development and the labor market, according to the university’s website.
Giraldo is a Paris-educated economist who serves on the committee charged with overseeing Colombia’s fiscal rule, or balanced-budget act, according to a biography on the committee’s website. He has taught at the National University in Bogota, and has published papers on topics related to social protection and public finances.
Petro didn’t say which of the other board members the pair will replace. The bank’s press office didn’t immediately reply to a request for comment sent outside normal business hours.
The board has split in recent months between a minority calling for faster interest rate cuts to revive economic growth, and a majority in favor of more modest reductions to ensure inflation continues to slow toward its target. At the bank’s December meeting, five of the seven policymakers voted to slow the pace of easing, while the other two, including Finance Minister Diego Guevara, argued for deeper cuts.
The new members could potentially tip the balance in favor of faster easing, if they were to side with Guevara.
“The two members seem in line with policies aimed at reducing interest rates at a faster pace,” said Sergio Olarte, chief economist at Panama-based Banco Latinoamericano de Comercio. “One might expect the tone of Banrep to lean more toward the dovish side.”
Guevara said in an interview last week that the new appointees will have profiles that align with the government’s vision. Petro has frequently expressed concerns that policymakers are hindering economic growth by failing to cut interest rates more quickly.
In December, Guevara suggested that the new members appointed by Petro could shift the balance toward deeper rate cuts. Since December 2023, the bank has reduced its key interest rate by 3.75 percentage points, bringing it down to 9.5%. Colombian inflation finished 2024 at 5.2%, exceeding the upper limit of the target range of 2-4% for the fourth consecutive year.