Colombia's central bank, pressured by President Alvaro Uribe over the past year to lower rates, will have a board composed almost entirely of his appointees when he fills two more seats by the end of this month, Bloomberg reported.
The new board could be the first with five directors on the seven-member panel appointed by the same president. The unprecedented situation arises because Uribe is Colombia's first president to serve two consecutive terms since Simon Bolivar, who took Colombia from the Spanish in 1819.
The prospect of a board loaded with Uribe's choices raises concerns among economists and former board members that the bank's independence could be seen as compromised. A politically packed body may ignore its mandate to contain inflation and focus instead on trying to stimulate growth, said Felipe Campos, an economist at Bogota-based brokerage Alianza Valores.
"The board hasn't had to choose between stimulating the economy and controlling inflation under Uribe, but they may face that dilemma in 2010," Campos said. "This opens a window for the central bank's independence to be questioned."
Uribe, who got congress to change the constitution in 2004 to allow presidents to serve back-to-back, four-year terms, said last year that monetary policy was too restrictive and a drag on the economy.