The XLI Meeting of Presidents of Central Banks of South America took place on September 22, 2023, in the city of Quito, Ecuador. Monetary authorities of the region analyzed the current dynamics of the world and regional economy and exchanged valuable experiences regarding the impact of the United States’ monetary policy on South America, the role of central banks in the development and innovation of payment systems, the estimation of the neutral interest rate, and the importance of global, sectoral, and local factors as determinants of inflation. The countries represented in this regional meeting were Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay.
In the current monetary context of the region, the meeting highlighted the importance of the evolution of payment systems during and after the COVID-19 pandemic, taking into account the regulatory framework and technological infrastructures available in each of the South American countries. Between 2018 and 2022, digital payments experienced an 84% increase in the annual volume of retail transactions, including transfers, automatic debits, e-money, and payment cards. Considering that the dynamics of digital payment usage may be limited by the levels of banking penetration achieved, it is noteworthy that central banks in the region have promoted several initiatives focused on regulatory advancements and innovations aimed at further developing instant payment platforms, greater interoperability among ecosystem participants, and increased financial inclusion.
Furthermore, the importance of estimating the neutral interest rate in the application of monetary policy and assessing its impact on a country’s economic variables was analyzed. It was also emphasized that various central banks in the region have a set of models that acknowledge the uncertainty in estimating the neutral rate, its trend movements, and structural changes.
Finally, the inflation dynamics of the region were examined from a disaggregated perspective, through the construction of a database for the international comparison of 93 categories of the Consumer Price Index (CPI) in more than 50 advanced and emerging economies. The joint movement of price series on a global, regional, sectoral, and national scale was also analyzed. Thus, it was concluded that common factors (global and sectoral) play a predominant role, although in the case of Latin American countries, local factors are of particular relevance.
At the conclusion of this regional event, monetary authorities agreed to convene the XLII Meeting in Colombia in the second half of 2024, thanking the Central Bank of Colombia for its willingness to be the future host. In the next edition, the Central Reserve Bank of Peru and the Central Bank of Uruguay will delve into research on payment systems and cross-border payments, the Central Bank of Colombia will present an analysis of methods for estimating potential GDP in the region, and the Central Bank of Chile will provide an analysis of
