Colombia | BanRep Holds Policy Rate at 9.5% by Majority Vote

Summary

The Board of BanRep kept the policy rate unchanged at 9.5%. Notably, concerns persist regarding inflation, exchange rate volatility, and fiscal uncertainty.

Key points

• Key points:
• The BanRep Board maintained the interest rate at 9.5%, signaling a less accommodative stance.
• Inflation remained stable at 5.2% in December. The Bank expressed concerns over the increase in the minimum wage and the acceleration of the Producer Price Index (PPI) and their potential impact on inflation.
• The Bank highlighted exchange rate volatility and fiscal uncertainty as factors warranting a cautious approach to rate cuts.
• The Bank’s staff revised slightly down the 2024 growth projection to 1.8% and expects growth of 2.6% for 2025.

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