Interest Rate in Colombia

Colombia Interest Rate | Economic News & Forecasts

Colombia - Interest Rate

Central Bank stays put at first meeting of the year

At its Board of Directors meeting held on 31 January, Colombia’s Central Bank (Banco de la República, BanRep) maintained the benchmark interest rate at 4.25%, where it has been since 27 April when the Bank cut the rate by 25 basis points. The Bank’s decision was unanimous and in line with market expectations.

Subdued inflation—pushed down further by lower oil prices—well-anchored inflation expectations, and healthy economic activity prompted the Bank to keep the rate on hold. Inflation inched down to 3.2% in December (November: 3.3%), nearing closer to the midpoint of the Bank’s 2.0%–4.0% target range. While buoyant domestic demand has supported growth, uncertainty lingers over the pace of the recovery. Going into 2019, growth is set to accelerate on higher oil production and an upturn in domestic demand. Meanwhile, the recently-approved tax bill, which included lowering the corporate tax rate from 33% to 30%, should boost investment.

The Bank’s accompanying statement indicated a continued neutral stance, offering little forward guidance beyond reiterating that the trajectory of inflation will be closely monitored in the context of global developments, including the U.S. Federal Reserve’s tightening cycle, the evolution of oil prices, and global trade tensions. That said, BanRep is expected to embark on a tightening cycle in 2019 given that the emerging El Niño weather phenomenon and the recently-announced minimum wage hike are likely to stoke prices price pressures. The next monetary policy meeting will be held on 22 March.



Colombia Interest Rate Forecast


LatinFocus Consensus Forecast panelists expect the policy rate to end 2019 at 4.89% and 2020 at 5.13%.

Colombia - Interest Rate Data

2013  2014  2015  2016  2017  
Policy Interest Rate (%)3.25  4.50  5.75  7.50  4.75  

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Colombia Interest Rate Chart


Colombia Interest Rate
Note: Monetary Policy rate in %.
Source: Colombia Central Bank.

Colombia Facts

ValueChangeDate
Bond Yield6.580.0 %Mar 11
Exchange Rate3,179-0.17 %Mar 11
Stock Market12,495-0.66 %Mar 11

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