Colombia’s central bank, Banco de la Republica, held its benchmark interest rate steady at 12% on Friday, a decision that caught most market participants off guard.
Investors had widely anticipated a further increase in borrowing costs, expecting the lender to continue its aggressive tightening cycle aimed at curbing persistent inflation.
Just last month, on July 1, the central bank raised rates to the current 12% level, continuing a series of hikes that began earlier in the year.
The pause marks a notable shift in monetary policy stance.
Just last month, on July 1, the central bank raised rates to the current 12% level, continuing a series of hikes that began earlier in the year.
The previous move on June 30 had been a substantial 75-basis-point increase, the fourth of the year, underscoring the urgency with which policymakers had been acting to anchor price stability.
By holding rates steady, the central bank appears to be recalibrating its approach, possibly assessing the lagged effects of previous hikes or weighing the economic cost of further tightening.