Colombia | BanRep keeps the policy rate unchanged at 9.25% in October

Summary

The Central Bank kept its policy rate at 9.25% for the fourth consecutive meeting, a decision reflecting caution amid persistent inflation risks and the ongoing economic recovery.

Key points

• Key points:
• Four board members voted to hold, two favored a 50-bp cut, and one a 25-bp cut. The majority supported stability given the renewed rise in inflation and higher expectations, reinforcing the Board’s cautious tone.
• Headline inflation rose to 5.2% in September and core inflation remained near 4.8%, both above target. Market- and survey-based expectations also stayed above 3% over the two-year horizon. The Governor projected convergence to the 3% target only by 2027, beginning gradually in 2026.
• Indicators confirm a continuing recovery, driven by private consumption and investment. The technical staff projects GDP growth of 2.6% in 2025 and 2.9% in 2026, with a slightly negative output gap closing faster than expected.
• The trade deficit widened due to stronger imports and weaker energy exports. On the fiscal front, the escape clause was activated, and the government expects Congress to approve a 16-trillion-peso financing law to support fiscal adjustment and the return to the parametric rule.

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