Colombia: BanRep to keep rate at 9.25%

At the monetary policy meeting on September 30, BanRep will most likely keep its key rate unchanged at 9.25%. As has been the pattern in previous meetings, the decision is likely to be divided, with four members voting for the pause and three members, including Finance Minister Avila and those aligned with the government, voting for cuts. Reasons supporting the pause include the persistence of core inflation, which remains around 4.85%. Core inflation has moderated very little in recent months. Domestic demand also continues to expand strongly in Q2 , at a rate higher than 4.0%, following an expansion of 4.7% in Q1. Inflation expectations have also increased recently.  Given our inflation forecast of 5.03% for December 2025, we don’t anticipate any rate cuts for the rest of the year. However, Governor Villar left the door open to cuts, so there could be one or two cuts in the next six meetings, including one in December, if inflation, particularly core inflation, falls more than expected.