Colombia will keep interest rates unchanged at 9.50% for the next month following a central bank meeting Thursday afternoon. The decision comes amid global economic uncertainty driven by President Donald Trump’s escalating tariffs in the United States.
Despite positive economic data in Colombia, a slowdown in inflation’s decline in early 2025 and rising global economic tensions since Trump took office prompted monetary authorities to take a cautious approach.
Colombia keeps interest rates unchanged
There was significant anticipation in Colombia ahead of the first meeting of the board of directors of the Bank of the Republic, the country’s monetary authority, now composed of a majority aligned with the government.
Following the appointment of two new members by President Gustavo Petro’s administration, today, Monday, March 31, marked the first session in which government-aligned members held a majority on the board.
However, the institution demonstrated the same caution as in the past and, surprisingly, chose not to lower the interest rate. During the upcoming month of April, the rate will remain at 9.50%, where it has held since December of last year.
As a result, Colombia will see its fourth consecutive month without an interest rate cut, interrupting a steady decline that had mirrored falling inflation throughout 2024.
In today’s vote, four board members backed keeping the rate unchanged, while three supported a 50-basis-point cut to 9%, a move some economic experts had predicted earlier in the day.
“This decision reaffirms the Board’s commitment to steering inflation toward its target amid a recovery in economic growth,” said Leonardo Villar, president of the Bank of the Republic.
Decisión de política monetaria:
En su reunión de marzo la #JuntaBanRep decidió por mayoría mantener inalterada la tasa de interés de política monetaria en 9,5%.Más información en el comunicado de prensa 👉 https://t.co/Dg3QvlE0vM pic.twitter.com/seb2Ye4ZK4
— Banco República 🇨🇴 (@BancoRepublica) March 31, 2025
Colombia remains cautious amid uncertain economic outlook
In this decision, the most recent inflation data carried significant weight. Over the past three months, inflation remained stable at 5.2%, even showing a slight increase in its annual rate in February (5.3%).
The most significant price increases were seen in processed foods and certain regulated goods, including gas and transportation. Meanwhile, core inflation, which excludes food and regulated items, continued its decline, edging down from 5.0% to 4.9%.
As a result, monetary authorities now expect inflation to remain above the initial 3% target projected last year for December 2025.
Colombia’s fiscal challenges—including cuts to the 2025 budget and rising debt levels—also played a key role in the decision to maintain a cautious approach on interest rates.
Beyond national borders, Colombia, like the rest of the world, is closely monitoring the ongoing economic war initiated by U.S. President Donald Trump. This conflict will enter a new chapter when tariffs on a wide range of products from numerous countries officially take effect next Wednesday, April 2.
Related: Colombia’s Petro Blames Political Motives for Interest Rate Stagnation.