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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.

Colombia Policy Interest Rate 11.75% (consensus 11.75%) in Apr-24

• The Banco de la República Colombia’s unsurprising decision to reduce the policy interest rate by 50 basis points to 11.75% aims to bolster economic growth against a backdrop of declining inflation, with the central bank maintaining a careful balance to avoid overheating the economy.
• Updated economic projections suggest a recovery, albeit juxtaposed with a concerning uptick in unemployment rates, presenting a challenge for ongoing monetary policy adjustments.
• External economic pressures, particularly from US policy shifts and global financial market trends, remain pivotal in shaping the future trajectory of Colombia’s monetary policy, emphasizing the importance of adaptive strategies to navigate international uncertainties.

Colombia CPI Inflation 1.09% m-o-m (consensus 1.0%) in Feb-24

- Colombia's inflation rate in February 2024 surpassed expectations by 0.1pp, reaching 1.09% m-o-m and 7.74% y-o-y.
- This monthly pace is the fastest increase since February 2023, exceeding the one-year average by 0.47pp.

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.