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UPDATE 1-Colombia cenbank names Echavarria as new head, replacing Uribe
December 12, 2016 / 6:35 PM / a year ago

UPDATE 1-Colombia cenbank names Echavarria as new head, replacing Uribe

(Adds details of new appointment)

BOGOTA, Dec 12 (Reuters) - Colombia’s central bank board named Juan Jose Echavarria as its new chief, tapping him to lead efforts to reduce inflation and accelerate economic growth while maintaining the bank’s independence, the bank said on Monday.

Echavarria, who replaces Jose Dario Uribe, is a former member of the board who studied economics at Boston University and Oxford.

Echavarria, 64, is also a former vice-minister of commerce. He will take up his administrative and board position on Jan. 4.

The board will also replace another two members during the first quarter of next year.

Policymakers grappling with high inflation and weaker economic expansion raised the benchmark interest rate for 11 consecutive months before holding it at 7.75 percent for the past four.

All seven board members can serve up to three four-year terms, except for finance ministers, who fill the government’s seat on the board. Uribe has reached his 12-year term limit.

The new chief is selected in secret voting by the other board members, who can also put themselves forward for the post.

“There are some basic characteristics, for example independence, prudence, knowledge of the challenges that are coming for the economy and central banks,” Uribe said last week.

Successors to the two other board members will be named directly by President Juan Manuel Santos, who in recent months has increased his public requests for the bank to lower the interest rate.

“Politics could weigh on the appointments, but the challenge for the new members is to demonstrate their independence and experience and not to allow what the president or government says to impact them,” said David Ospina, an analyst at Acciones y Valores brokerage.

The appointments will be made amidst division on the board. At its November meeting five members voted to hold the rate to ease inflation that is well above the government’s 2 percent to 4 percent target range, while two wanted a 25 basis point cut to help stoke economic growth.

Board member Carlos Gustavo Cano, who recently disclosed his support for keeping the rate high until inflation was under control, is reaching his 12-year limit.

The second board member due to leave has not been named, but bank sources with knowledge of the matter told Reuters it is likely to be Cesar Vallejo, who has served for 8 years. (Reporting by Nelson Bocanegra and Bogota newsroom; Writing by Helen Murphy and Julia Symmes Cobb; Editing by Bernard Orr)

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