The Board of Directors of Banco de la República raised the benchmark rate by 100 bp to 11.25 percent, citing the renewed uptick in headline and core inflation early in 2026, still-elevated market and survey expectations, and downside surprises to 2025 growth. After holding the rate at 9.25 percent through December and lifting it by 100 bp to 10.25 percent in January, the latest move extends the tightening cycle. Headline inflation climbed to 5.4 percent in January and 5.3 percent in February from 5.1 percent in December, while core inflation reached 5.5 percent; analysts’ year-end 2026 expectations eased only marginally to 6.3 percent and debt-market measures hover near 7 percent, both well above the 3 percent target. GDP expanded 2.2 percent y/y in Q4 and 2.6 percent in 2025, undershooting the staff’s 2.9 percent estimate. The board also flagged the Iran war’s mixed effects—stronger oil-driven terms of trade but higher costs for imported gas and fertilisers—as a potential source of additional inflationary pressure. It reiterated that future decisions will hinge on incoming data to restore a clear downward path for inflation.
Central Bank of Colombia 2026-03-31
Banco de la República lifts benchmark rate 100 bp to 11.25 %
Banco de la República lifted its policy rate by 100 bp to 11.25 %, following January’s similar move, to counter rising headline (5.4 % y/y in February) and core (5.5 %) inflation, stubborn expectations (6.3–7 %) and weaker-than-forecast 2025 growth. The board also warned that Iran-related commodity shocks could add price pressure and said further action will depend on data to secure a clear disinflation path.