Colombia Hikes Policy Rate to 10.25%

EthereumCraftsman · 2026-01-30T18:28:32+00:00

The Central Bank of Colombia increased its policy rate to 10.25% to combat rising inflation, with mixed board support. While December inflation was slightly below expectations, core inflation and future forecasts are rising amidst economic uncertainty.

EthereumCraftsman

2026-01-30 18:28:32

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The Central Bank of Colombia raised its policy rate by 100 bps to 10.25% in its January mmeting where four board members voted for the increase, two voted for a 50 bp reduction and one voted to keep the rate unchanged. The board noted that headline inflation in December was 5.1%, slightly below end-2024 (5.2%), while core inflation rose to 5.02% and inflation expectations jumped in January, analysts’ median rose to 6.4% for end-2026 and to 4.8% for end-2027, with market-based two-year expectations above 6%. Indicators for the fourth quarter suggest the economy maintained good dynamism and the technical team estimates GDP grew 2.9% in 2025. The current-account deficit is estimated at 2.4% of GDP for 2025. Uncertainty about external conditions remains elevated due to trade tensions, migration measures in the US, geopolitical conflicts and sovereign-risk perceptions. The committee said the decision is aimed at bringing inflation onto a declining path.

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