Colombia's Monetary System

The monetary system in Colombia started around the 1870, before that year banks in Colombia did not exist. Is there were no banks, they could not be any bills, so they money circulated by using coins of gold, silver, nickel and copper. On 1870 the first bank was created it was El Banco de Bogota, there were three changes in which the monetary system was created in Colombia this were: "confiscation of mortmain in 1860, the enactment in 1863 of the Constitution of Rionegro, and Colombian private banking in 1870" (Meisel)

El Banco de la Republica is govern by the scheme of targeting inflation, which purpose is to maintain a low/stable rate of inflation and achieve a wealth that coincide with the capacity of the economy. It is rule by the mandate of the Constitution to promote the improvement of the welfare of the population. El Banco de la Republica determines the monetary policy to maintain the inflation rate around the 3%.The monetary policy decision are taken based on the actual state analysis, and the goal made against the inflation. It help to ensure the stability of the prices, the improvement of life and the generation of more jobs.

The monetary policy that rules El Banco de la Republica is the same it was made by following the policy example of inflations that is conducted by the FED. They both analyze the different type of shocks that the interest rate variation create. A difference is that is the USA (FED) the monetary policy transmission is quicker that in Colombia (Banco de la Republica). The inflationary control is more complex in Colombia.

Photo Credit: Grupo Gaes Banca

MLA Citation:

Meisel, Gustavo A. "Orígenes De La Banca Comercial En Colombia : La Banca Libre, 1870-1886 | Banrepcultural.org." Orígenes De La Banca Comercial En Colombia : La Banca Libre, 1870-1886 | Banrepcultural.org. Credencia Historia, Mar. 2001. Web. 03 Apr. 2014. <http://www.banrepcultural.org/blaavirtual/revistas/credencial/marzo2001/135origenes.htm>.

"La Estrategia De Inflación Objetivo En Colombia." Banco De La República (Banco Central De Colombia). Banco De La Republica, 2013. Web. 03 Apr. 2014. <http://www.banrep.gov.co/es/politica-monetaria>.

Rodriguez, Romez. "Universidad De La Salle." La Política Monetaria De La Reserva Federal Y Del Banco De La República: Entre La Ortodoxia Y Las Presiones Inflacionarias. Asimetrías En La Transmisión De La Política Monetaria. Universidad De La Salle, 2008. Web. 03 Apr. 2014. <http://revistas.lasalle.edu.co/index.php/ed/article/view/269>.