Colombia Interest Rate

The Central Bank of Colombia reduced its benchmark policy rate by 25 bps to 9.25% in April 2025, with the Board voting unanimously for the cut. Annual inflation resumed its downward trend, easing to 5.1% in March from 5.3% in February, while core inflation excluding food and regulated prices continued to soften, falling to 4.8% from 4.9%. Activity indicators for the first quarter suggest GDP grew 2.5% year-on-year, prompting the technical team to raise its growth forecast for 2025 to 2.6% (and to 3.0% for 2026). However, external financing conditions have become more restrictive amid global trade tensions, heightened financial market volatility and a stronger dollar, bolstering Colombia’s risk premium and keeping inflationary pressures elevated, which limits scope for more aggressive rate cuts. The Board emphasized that future policy decisions will depend on incoming economic data.