Colombia Holds Rate at 9.25%

In October 2025, the Central Bank of Colombia decided to maintain its benchmark policy rate at 9.25%. This decision saw four directors voting for stability, while two directors advocated for a 50 basis point cut, and one preferred a 25 basis point reduction. In September, annual inflation increased to 5.2%, with core inflation—excluding food and regulated prices—remaining elevated at 4.8%, both figures exceeding the 3% target, suggesting a slower rate of convergence towards this goal. Inflation expectations have risen, and both survey and market measures predict levels above the target for the upcoming two years. Domestic demand continues to show robust momentum, propelled by both private and public consumption, alongside a resurgence in machinery, equipment, and civil works investment. Externally, financial conditions have improved following interest rate cuts by the United States; however, the trade deficit widened as imports grew more rapidly than exports, driven by strong domestic demand. The Board highlighted that future policy decisions will be contingent upon the trajectory of inflation and expectations, economic activity dynamics, and the equilibrium of internal and external risks.

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