Colombia’s Unpredictable Central Bank Vows to Talk Much Less

(Bloomberg) -- Colombia's central bank is wheeling out a new communications policy: it's going to talk much less.

A team from Sweden's Riksbank visited Colombia last year to evaluate the bank, and gave it low marks for getting its message across, governor Juan Jose Echavarria said.

“We've changed our communications policy radically,” Echavarria said. “What this is really about is that the bank needs to give a consistent message that people understand.”

That will come as welcome news to local economists, who have been continually wrong-footed by the bank's confusing communications. The bank delivered no fewer than seven surprises during its most recent phase of interest rate cuts, which ended in April 2018.

Echavarria made the remarks in a phone interview, adding that such interviews will be few and far between from now on.

As part of its push to align its policies with international best practices, the bank has cut the gap between policy meetings and publishing the minutes to one working day, from two weeks. It's also trying to give a clearer picture of what information was relevant in taking interest rate decisions, Echavarria said.

Radio Guest

The governor used to be a frequent guest on morning commute shows on the radio, but the new policy is that interviews will be “in principle, very few, and hopefully none,” he said.

Least Predictable Central Bank in the Americas Surprises Again

Colombia's policy makers also consulted their counterparts at the U.S. Federal Reserve, the European Central bank, the People's Bank of China and the Bank of England before deciding on their new strategy, Echavarria said.

Based on the advice they received, the bank hired a U.S. translator to improve the quality of its reports in English and make them more accessible to foreign investors.

The central bank will continue to give press conferences after each interest rate decision, as it has done for more than a decade.

Federal Reserve Chairman Jerome Powell adopted this practice in January 2019.

The bank policy rate has left its policy rate unchanged at 4.25% since April 2018.

--With assistance from Craig Torres.

To contact the reporter on this story: Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Matthew Bristow

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