Central Bank of Colombia Delivers Surprise 25-Basis Point Interest Rate Cut – Currency Thoughts

Central Bank of Colombia Delivers Surprise 25-Basis Point Interest Rate Cut

April 30, 2025

From a 13.25% peak maintained from April 2023 until an initial 25-basis point cut in December of that year, Colombia’s central bank interest rate had peaked at 13.25%. CPI inflation had slowed from 13.3% to high single-digit territory by the time of that initial rate but stall just above 5% late last year. 350 basis points of additional interest rate reduction had been undertaken during 2024, but the cycle was then paused. Although inflation in March 2025 of 5.1% was down from 5.3% in February, that still was well above the central bank’s target, leading analysts not to expect a rate change at today’s review. Instead, the rate was cut from 9.5% to 9.25%, and officials released a statement of explanation that asserts,

Annual inflation resumed its downward trend. Inflation expectations derived from public debt markets fell. The decision adopted by the Board at its meeting today reflects a cautious approach to monetary policy, while continuing to support the recovery of economic activity without jeopardizing the convergence of inflation toward the target.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Central Bank of Colombia

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on Wednesday, April 30th, 2025 at 1:38 pm and is filed under Central Bank Watch.
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