Colombia Maintains Benchmark Rate at 9.5%, Citing Inflation Risks

Colombia's central bank decided to maintain its benchmark interest rate at 9.5%, surprising market analysts who anticipated a potential cut amid ongoing inflation pressures and fiscal challenges. The decision was supported by four out of seven board members, while three voted for a 50 basis point reduction. Inflation slightly increased to 5.3% in February, with core inflation easing to 4.21%, though risks remain due to external factors and fiscal uncertainties. The central bank raised its GDP growth forecast for 2025 from 2.6% to 2.8%, indicating a positive economic outlook despite the current challenges. This decision marked the second consecutive meeting where the rate was held steady, reflecting the bank's cautious stance in light of persistent inflation risks. Future rate adjustments will depend on incoming economic data, emphasizing the bank's commitment to responding to market conditions.