[Economics] How Colombians feel about the rise in interest rates and usury

[Draeno]

 

 

 

The Board of Directors of Banco de la República (Banrep) and the Financial Superintendence of Colombia, respectively updated the new intervention and usury interest rates for the month of April, leaving them at 13% and 47.09% .

This responds to the Bank's position that, in the next two months, inflation in the country will reach its ceiling and, thus, begin to drop. However, the effects of these adjustments could have a direct and negative impact on productivity and national consumption in the coming months, with a projection to the month of May, as Henry Amorocho Moreno, professor of Public Finance and Budget at the University of Catalonia, explained to Portfolio. Rosario University.

"Raising intervention interest rates and usury interest rates is punishing the two lines of the economy: entrepreneurship and consumption."

According to the teacher, the increase in interest rates can be seen reflected in the price of inputs that goods companies acquire to manufacture their products, which, after all this process, will be manifested in the final price. to the consumer.

Likewise, Amorocho also added the value of the Colombian peso with respect to the dollar, since the Colombian currency has had a huge fluctuation in its value against the United States and, the dollar being the reference currency for price quotations in the international market. , causes the prices that are handled in the Colombian internal market to have a constant change, whether they are up or down.

"The effect of interest rates has an immediate effect on the enterprises, because with a volatility of the exchange rate and with an inflationary policy like the one we have, they generate a strong effect on prices, increasing the costs of production," he explained.

Regarding the usury rate, the expert assured that the Bank, by raising this concept to a figure close to 50%, seeks to limit consumption, which in a context of inflation that closed in February at 13.3%, may be an explainable measure.

However, this adjustment, according to Amorocho, goes against the actions of private banks, which, during the month of March, decided in stages to lower interest rates on some of their products in order to encourage consumption.

“What is happening is that the delinquent portfolio is increasing and the demand for loans is decreasing. However, the Superfinanciera, by giving that reading to usury rates that are going to rise, basically with the same application of the intervention rates, leads to the conclusion that this will have effects in a very short time on the levels of productivity and, of course, in the increase in costs, not only in production, but also in consumption”.

Therefore, the financial authorities expect that, with the new rates, an inflation ceiling will be reached from which this factor will begin to fall, however, this would be taking place under the risk that the productivity of the companies has a relapse. , thus reducing the supply of products, which would be offset by the increase in prices, also affecting the final consumer.

 

https://www.portafolio.co/economia/finanzas/interes-y-usura-sus-efectos-en-el-mercado-colombiano-580823