LatinNews Daily - 01 October 2025

*Colombia’s central bank (Banrep) has held its benchmark interest rate at 9.25% in its third consecutive decision to keep the rate unchanged, following a 25 basis-point cut in late April. In a statement, Banrep noted that annual inflation was running at 5.1% in August, exceeding forecasts, and up from 4.90% the previous month. According to a Banrep statement this suggests “a slower convergence toward the 3% target”. It comes as Banrep announced the decision to cancel a two-year flexible credit line (FCL) agreement with the International Monetary Fund (IMF) worth around US$8.1bn which had been in place since April 2024 but to which the IMF had suspended access in April 2025 – meaning the bank’s announcement was more a formality. It comes the day after the IMF released a report following the conclusion of an Article IV consultation in which it warned that “Colombia’s fiscal policy and policy framework have deteriorated” since the 2024 request of the FCL, citing “repeated fiscal slippages and the temporary suspension of the fiscal rule”. The same report “commended the central bank’s tight monetary policy stance, which has supported reducing inflation”. According to Banrep, the decision to cancel the current FCL comes as Colombia’s international liquidity position is “adequate”, with international reserves at US$65.5bn.

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