February 07, 2024

Colombia CPI Inflation 0.92% m-o-m (consensus 0.9%) in Jan-24

- Colombia's Consumer Price Index (CPI) recorded a month-on-month inflation rate of 0.92% in January 2024, marking the highest level of inflation since March 2023, but not surprisingly so.
- The current inflation rate exceeds the one-year average by 0.25 percentage points and is back to the long-run average, indicating a potential resurgence in pricing pressures and the need for careful analysis and policy responses.

January 31, 2024

Colombia Policy Interest Rate 12.75% (consensus 12.5%) in Jan-24

  • The Banco de la República Colombia's cautious 25 basis point interest rate cut to 12.75%, against the consensus expectation of a 50 basis point reduction, reflects a strategy that is responsive to the ongoing decline in inflation, mixed sector-specific inflationary signals and a commitment to gradual monetary easing.
  • Economic projections remain steady, with improving external financial conditions and a significant correction in the current account deficit, providing a backdrop for the conservative rate cut despite a stronger peso and reduced sovereign risk.
  • The Board's decision-making process emphasizes a vigilant stance toward inflation convergence, mindful of wage policy impacts and global risks, while maintaining a clear orientation towards data-driven policy adjustments.

January 10, 2024

Colombia CPI Inflation 0.45% m-o-m (consensus 0.6%) in Dec-23

- Colombia's CPI inflation increased by 0.45% m-o-m in December 2023, falling slightly short of the consensus forecast of 0.6%.
- This growth rate is only marginally less than in November and much higher than in October 2023. Pricing trends currently appear stable around this level in Colombia.

December 19, 2023

Colombia Policy Interest Rate 13% (consensus 13%) in Dec-23

  • The Banco de la República Colombia's interest rate cut by 25 bps to 13.00% aligned with the economic consensus, reflecting the Board's response to the sustained decline in inflation and a commitment to support economic activity amidst a backdrop of mixed inflation expectations.
  • External improvements, including a stronger currency and reduced sovereign risk, coupled with the Board's caution against wage-induced inflationary pressures, demonstrate a strategic approach to balance growth with inflation targeting.
  • Future monetary policy adjustments will remain contingent on incoming data, with the overarching objective of bringing inflation closer to the 3% target while monitoring global financial developments and domestic economic indicators.