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October 31, 2024
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Colombia: 50bp Rate Cut To 9.75% in Oct-24

  • Banco de la República reduced its policy rate by 50bps to 9.75%, continuing its easing cycle, although three members preferred a more aggressive 75bps cut.
  • Inflation has moderated to 5.8%, yet core inflation at 5.5% and a weakening peso signal caution in future rate cuts, as imported inflation risks could limit BanRep’s flexibility.
  • Colombia’s upwardly revised growth projections contrast fiscal and exchange rate pressures, which BanRep indicates will be critical in assessing the pace of additional easing.
September 30, 2024
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Colombia: 50bp Rate Cut To 10.25% in Sep-24

  • BanRep reduced its policy rate by 50bps to 10.25%, driven by lower-than-expected inflation figures, though internal divergence saw some board members push for a 75bps cut.
  • Declining inflation, particularly in food and regulated items, coupled with moderate GDP growth, supports a gradual easing cycle; however, inflation expectations for 2025 remain stable.
  • Rising risk premiums due to a weaker fiscal position and falling oil prices present external risks, likely influencing BanRep’s cautious approach to further rate cuts.
July 31, 2024
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Colombia Policy Interest Rate 10.75% (consensus 10.75%) in Jul-24

  • The Banco de la República’s decision to cut the benchmark rate by 50 basis points to 10.75% reflects ongoing efforts to stimulate economic growth amid a complex inflationary environment, where core inflation shows slight improvement. In contrast, food inflation rises due to climatic impacts.
  • Economic recovery is expected to continue, with GDP growth projected at 1.8% for 2024, supported by less restrictive external financing conditions due to looser monetary policies from major global central banks.
  • The central bank maintains a cautious yet flexible monetary policy stance, emphasizing that future rate adjustments will be contingent on incoming economic data and global financial conditions, ensuring a responsive approach to dynamic market realities.
June 28, 2024
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Colombia Policy Interest Rate 11.25% (consensus 11.25%) in Jun-24

  • The Banco de la República Colombia cut its policy interest rate by 50 basis points to 11.25%, aligning with the economic consensus. It reflects a cautious approach to stimulating growth amid mixed inflation signals and elevated food prices.
  • Stronger-than-expected GDP growth of 0.9% in Q1 indicates a recovery path. Yet, inflation expectations remain elevated, with public debt market forecasts suggesting inflation will stay above target until the end of 2025.
  • Restrictive international financial conditions have increased the country’s risk premium and depreciated the peso, raising inflationary pressures.

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