Colombia's central bank kept the benchmark interest rate at 12.25% after four members voted for holding while three pushed for an increase. The decision came as the bank cited slowing economic growth in the third quarter, with indicators of domestic demand pointing to weaker private and public consumption. Activity contracted slightly in August for the first time since April 2025, while manufacturing and retail sales fell short of expectations.
Inflation accelerated to 6.29% in September and is forecast to remain above the target range through 2027, extending a streak of misses to seven consecutive years. Fiscal uncertainty persists as the government sent Congress an "economic rescue" bill aimed at addressing growing debt loads. The plan includes spending cuts but faces resistance over broadening VAT and income-tax bases and raising social-security contributions.
Separately, the board authorized a $2 billion purchase from the government, with Governor Leonardo Villar noting international reserves were below recommended levels before the accumulation program began.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing