Colombia interest rate: Banrep holds at 12.25% in a 4-3 vote

What happened. On 30 October the board of Banco de la República voted by majority to keep the policy rate at 12.25%. Four directors voted to hold, three wanted to raise it by 25 basis points, or 0.25 percentage point. The bank stressed that monetary policy stays restrictive and that future decisions depend on new data.

What markets expected. Many were surprised by the pause. In a Reuters poll, 17 of 31 analysts expected a hike to 12.5% and 13 expected a hold. In a Citi survey cited by El Espectador, 13 of 21 respondents predicted a hike. Most of the market believed 12.5% would be the year-end level.

Why the bank did not hike. By the bank's reading, growth slowed in the third quarter: consumption is growing more slowly, and the August activity indicator and manufacturing and retail surveys point to weak results. Core inflation (excluding food and regulated prices) eased from 6.1% in August to 6.0% in September.

Why it is not over. Annual inflation edged up to 6.29% in September, against the 3% target. Analysts expect 6.9% in December 2026. The bank calls the El Niño weather phenomenon an important upside risk for food and regulated prices. The day before, the government sent Congress an economic rescue bill with higher taxes and spending cuts. The bank asked for a careful study of it.

Why it matters to you. The Banrep rate is the starting point for many other rates in Colombia, from consumer loans to mortgages. For a foreign investor, a high peso rate means a higher yield on peso holdings, but also risk: the exchange rate can move fast when sentiment changes. The gap with the US Fed rate (3.75-4%) is more than threefold, and Bancolombia thinks that supports the peso. That is our reading, not an exchange rate forecast.

What we don't know. What the board will decide in December: a hike, a pause or something else. How the rescue bill fares in Congress and affects prices. Whether the third-quarter data due in mid-November confirm the slowdown.

حقائق مؤكدة

• On 30 October 2026 the board of Banco de la República decided by majority to keep the policy rate at 12.25%: four directors voted for that and three for a 25-basis-point hike.^[1][2]
• The bank said the decision keeps monetary policy restrictive and that future decisions depend on new information.^[1]
• Annual inflation in Colombia was 6.29% in September, against the bank's 3% target.^[2][3]
• Core inflation (excluding food and regulated prices) fell from 6.1% in August to 6.0% in September.^[1][2]
• Analysts' inflation expectations for December 2026 rose to 6.9%, and stayed around 4.0% on a two-year horizon.^[1]
• The bank judges that growth slowed in the third quarter and calls El Niño an important upside risk for food and regulated prices.^[1]
• In a Reuters poll, 17 of 31 analysts expected a 25-basis-point hike to 12.5% and 13 expected the 12.25% rate to stay.^[3]
• In a Citi survey, 13 of 21 respondents expected a hike and eight a hold.^[2]
• The 12.25% rate is the highest since March 2024; the bank has raised it by 300 basis points since December 2025.^[2]
• There is no board meeting in November; the next rate vote is in December.^[3]
• The day before, the government sent Congress an economic rescue bill, and the bank urged a careful study of it.^[1][2]
• The Banrep rate is more than three times the US Fed rate; Bancolombia says a wider rate gap favors the peso.^[4]

التبعات

• مؤكدColombia's rate stays at its highest level since March 2024, and the bank says policy remains restrictive.
• قراءتناThree of seven directors wanted a hike, so a hike in December is possible.
• قراءتناA high rate and a wide gap with US rates can support the peso, but the exchange rate also depends on oil, investor mood and the budget.

لا يزال مجهولًا

• What the board will decide in December.
• How the rescue bill fares in Congress and affects prices.
• Whether the third-quarter data due in mid-November confirm the slowdown.

من يتأثر

Colombia, Latin America. People who follow the peso, inflation and emerging-market rates, and borrowers in Colombian pesos

المصادر

1. Banco de la República: La Junta Directiva del Banco de la República decidió por mayoría mantener inalterada la tasa de interés de política en 12,25% 30 أكتوبر 2026 · رسمي
2. El Espectador: Las tasas de interés se quedan quietas: ¿por qué el Banrep no las subió en octubre? 30 أكتوبر 2026 · إعلام
3. Reuters: Colombia central bank seen hiking rates on Friday, though hold not ruled out 30 أكتوبر 2026 · إعلام
4. El Espectador: Precio del dólar hoy en Colombia: así cerró la moneda este 30 de octubre 30 أكتوبر 2026 · إعلام