Colombia central bank transfers $1.6 billion to government

The Central Bank of Colombia approved the transfer of slightly more than $1.6 billion in net profits to the government on February 28.

The board said it had nearly $1.8 billion in total profits from 2022 and earlier years. By law, some of these are allocated to cultural activities, other expenses and the central bank’s own reserves. The rest “is the nation’s”.

The funds will be paid to the treasury in government bonds. The state budget for 2022 was $93 billion.

The central bank’s profits increased markedly from 2021, when it made $632 million and remitted $556 million. However, it made $6.85 billion in 2020.

The pandemic has caused a number of central banks to post large losses. In the case of the Bank of Canada – which posted its first-ever losses last year – this is in large part because it is paying higher interest rates on bank reserves. Central banks are also selling assets from earlier QE operations.

Last month, the Central Bank of Brazil registered a loss of 298.5 billion reais ($57.4 billion) for 2022.

Mexican president Andrés Manuel López Obrador came into conflict with the Bank of Mexico in 2020 when he demanded early remittance of its net profits. The central bank refused – in the end, it made no net profits for that fiscal period.