Colombia | BanRep raises its benchmark rate by 100 basic points to 10.25% in January

Summary

The Central Bank (of Colombia), in a split decision, raised the monetary policy rate by 100 basis points in January, bringing it to 10.25%. The decision was based on the strong performance of the economy, the sharp increase in inflation expectations, and the deterioration in the current account.

Key points

• Key points:
• BanRep, by majority vote, raised the policy rate by 100bp in January to 10.25%, the first rate hike in 33 months.
• Inflation expectations rose sharply for both 2026 (6.4% from 4.6%) and 2027 (4.8% from 3.8%).
• Several activity indicators and labor market figures point to a resilient economy.
• The policy rate is expected to continue rising at subsequent meetings, with the aim of bringing inflation back to target.

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