The Central Bank of Colombia raised its monetary policy rate by 25 basis points to 12.25% by majority vote as headline and core inflation increased and near-term inflation expectations rose, maintaining a restrictive stance consistent with an expected decline in inflation during 2027. After holding the rate at 9.25% through December 2025, it raised rates by a cumulative 275 basis points from January to June 2026 to 12%, then held in July. Headline inflation reached 6.2% in August, above the 3% target, while expectations for December 2026 rose to 6.8% and the El Niño phenomenon could add pressure to food and regulated-item prices. Seasonally adjusted gross domestic product grew 3.4% year on year in the second quarter, although the Economic Monitoring Indicator slowed to 1.1% growth in July. International financial conditions tightened somewhat amid prospects of more restrictive monetary policy in advanced economies. Future decisions will depend particularly on information about El Niño, earthquake recovery and fiscal policy measures.
Central Bank of Colombia Raises Policy Rate by 25 Basis Points to 12.25%
The Central Bank of Colombia raised its monetary policy rate by 25 basis points to 12.25% by majority vote as headline and core inflation and near-term expectations increased. Headline inflation reached 6.2% in August, and future decisions will depend particularly on El Niño, earthquake recovery and fiscal policy measures.