Colombia's Central Bank Pauses Interest Rate amid Inflation Concerns

Colombia's central bank has decided to keep its benchmark interest rate steady at 9.25%, a move anticipated by the market. This decision comes amid persistent inflationary pressures and reinforced economic figures, despite global uncertainties.

The board's vote saw four members in favor of maintaining the rate, with two advocating for a 50 basis point reduction and one suggesting a 25 basis point cut. Recent data points to a 2.5% growth in the second quarter, driven by robust domestic demand, particularly in public works and machinery.

However, the country is likely to miss its 2025 inflation target for the fifth year in a row, with annual inflation at 5.1%, exceeding the 3% goal. In related developments, Colombia plans to cancel its flexible credit line with the International Monetary Fund, signaling confidence in its international reserve levels.

(With inputs from agencies.)