Archive

October 01, 2025
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Colombia Holds Rates at 9.25% Amid Inflation Persistence

  • The central bank held rates at 9.25% in a 4-3 split vote, matching consensus expectations but extending the pause cycle to four months amid 5.1% inflation.
  • Slower inflation convergence toward 3% target drives caution as service prices remain sticky and analyst expectations rise to 5% for 2025.
  • Fiscal deficit widening to 7.1% of GDP and rule suspension through 2027 limits monetary policy flexibility and prolongs the restrictive stance.
July 31, 2025
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Colombia: Hawkish Policy Pivot

  • Colombian rate held at 9.25% contrary to consensus, with the Board prioritising persistent core inflation over growth concerns in a split 4-3 decision.
  • Fiscal deterioration following S&P/Moody's downgrades constrains monetary easing through sovereign risk premium transmission.
  • Robust domestic demand growth of 4.1% and sticky services inflation justify a restrictive stance despite headline disinflation to 4.8%.
April 30, 2025
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Colombia: 25bp Rate Cut To 9.25% (Consensus 9.5%) in Apr-25

  • Banco de la República unanimously cut its benchmark rate by 25bps to 9.25%, surprising consensus expectations for no change and breaking a recent streak of unexpected holds.
  • Inflation resumed its downward path, with core and headline figures easing and market-based expectations declining, supporting a measured policy loosening stance.
  • While domestic demand remains resilient and growth forecasts have been upgraded, external financing conditions and fiscal uncertainty continue to pose constraints on the pace of further easing.
March 31, 2025
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Colombia: Policy Rate Held At 9.5% (Consensus 9.25%) in Mar-25

  • Banco de la República held the policy rate steady at 9.5%, surprising consensus expectations for a 25bp cut, as most board members prioritised caution amid rising inflation and external uncertainty.
  • Headline inflation rose slightly to 5.3% in February, with persistent pressures in regulated and food prices, while inflation expectations remained above target across market-based and survey measures.
  • With the labour market exhibiting strength, and fiscal and global risks still elevated, the central bank has delayed further rate cuts until more conclusive data becomes available.

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