At its March meeting, the Central Bank of Colombia raised its policy rate by 100 basis points to 11.25%. Four board members voted in favor of the 100 bp hike, two supported a smaller 50 bp increase, and one preferred to leave the rate unchanged.
The board noted that headline inflation in February stood at 5.3%, slightly above the bank’s end-2025 projection of 5.1%, while core inflation rose to 5.5%. Inflation expectations eased only marginally in March: analysts’ median forecast declined to 6.3% for end-2026 and remained at 4.8% for end-2027, while market-based expectations were close to 7%.
Fourth-quarter indicators show that the economy grew 2.2%, and the central bank’s technical staff estimates GDP growth of 2.6% in 2025. The current-account deficit continues to be affected by mixed terms of trade, driven by higher oil prices and more expensive imports, such as natural gas.
The bank highlighted that external uncertainty remains high, reflecting factors such as the war in Iran, risks to global economic stability, and ongoing inflationary pressures stemming from imported fertilizers. According to the committee, the rate increase is intended to set inflation on a clearly declining trajectory.