Colombia Unexpectedly Raises Key Interest Rate

2026-09-30 20:52 By Isabela Couto 1 min. read

Colombia’s central bank unexpectedly raised its policy rate by 25 basis points to 12.25% on its September meeting, the highest level since early 2024, as it seeks to bring inflation back toward target after years of above-target price growth.

Four policymakers backed the increase, while two voted to hold and one favored a larger 50-basis-point hike.

Annual inflation accelerated to 6.24% in August and is expected to remain above the upper end of the central bank’s 2%-4% target range through 2026 and 2027.

The board said the decision maintained a restrictive monetary policy consistent with a declining inflation path in 2027.

Meanwhile, recent data pointed to weaker economic activity, with urban unemployment rising to 9.1% in August and economic activity, manufacturing and retail sales falling short of forecasts in July.

The decision came amid concerns over the country’s fiscal outlook, with the government facing a widening budget deficit and seeking discussions with the IMF.



News Stream
Colombia Unexpectedly Raises Key Interest Rate
Colombia’s central bank unexpectedly raised its policy rate by 25 basis points to 12.25% on its September meeting, the highest level since early 2024, as it seeks to bring inflation back toward target after years of above-target price growth. Four policymakers backed the increase, while two voted to hold and one favored a larger 50-basis-point hike. Annual inflation accelerated to 6.24% in August and is expected to remain above the upper end of the central bank’s 2%-4% target range through 2026 and 2027. The board said the decision maintained a restrictive monetary policy consistent with a declining inflation path in 2027. Meanwhile, recent data pointed to weaker economic activity, with urban unemployment rising to 9.1% in August and economic activity, manufacturing and retail sales falling short of forecasts in July. The decision came amid concerns over the country’s fiscal outlook, with the government facing a widening budget deficit and seeking discussions with the IMF.
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Colombia Holds Interest Rate at 12.0%
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