Colombia Interest Rate

The Central Bank of Colombia cut its benchmark interest rate by 50 basis points to 9.75% in its October meeting, as widely anticipated, a move backed by four board members, while three preferred a 75 basis point reduction. Annual inflation dropped to 5.8% in September, down from 6.1% in August, with core inflation stable at 5.5%, primarily due to persistent service inflation. Growth projections were revised upward to 1.9% for 2024 and 2.9% for 2025 as economic activity has improved each quarter since late 2023. Despite this rate cut, recent exchange rate pressures linked to a strong dollar, declining oil prices, and concerns over Colombia's fiscal outlook could limit further monetary easing. The bank emphasized that future rate decisions will rely on incoming economic data.