Monetary and Exchange Rate Policies in Colombia: Progress and Challenges (1991-2002)

This paper focuses on monetary and exchange rate policies in Colombia, with particular emphasis over the period 1999-2002, when flotation of the peso/dollar and inflation targeting were adopted. We argue, first, in favor of adopting “operational inflation ranges”, once inflation has been brought down to one digit over the last four years, and, secondly, in favor of strengthening the current scheme of foreign exchange “options” as a way to better confront turbulence in the international capital markets.