Colombia | BanRep rate stable at 9.25%. Government announces measures to finance 2026

Summary

For the fifth consecutive meeting, BanRep held the policy rate steady at 9.25% in a split decision. Although inflation eased in November, it remains above the target, in a context of dynamic domestic demand supported by high consumption.

Key points

• Key points:
• BanRep held the rate at 9.25% with a split vote (4 to hold, 2 to cut 50bp, and 1 to cut 25bp). The Board highlighted that, although total inflation fell to 5.3% in November and core inflation to 4.9%, both remain above the target. It is highlighted that future inflation expectations for one and two years increased to a greater degree than observed inflation.
• In terms of activity, BanRep highlights the good performance of the economy; with annual economic growth of 3.4% (seasonally adjusted) in the third quarter, exceeding the technical team's forecasts (3.0%) and that the growth momentum came mainly from domestic demand, with an expansion of total consumption of 5.6%. The Chair mentioned the concern regarding the imbalance between supply and domestic demand that has been transmitted into a widening of the external imbalance.
• Regarding fiscal issues, the statement includes a call to the National Government to take action to balance the National General Budget given the non-approval of the Financing Law.
• Taking advantage of the call for fiscal action, the Minister of Finance announced at the press conference the declaration of an economic emergency that could take place in the coming hours.

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