Colombia Economy · Interest Rates · 23 October 2026
Key Facts
—Decision. Banco de la República raised its policy rate by 0.25 points to 12.25%, effective 1 October 2026.
—Vote. Four board members backed the rise, two wanted no change and one wanted 0.5 points.
—This year. The rate is up three full points in 2026, from 9.25% at the end of 2025.
—Inflation. Annual inflation was 6.2% in August, against the bank’s 3% target.
—Prediction markets. Polymarket prices “no change” at 58.5% for the October meeting and a 0.25-point rise at 20.5% (23 October 2026, 6:11 p.m. ET).
Colombia’s central bank raised its benchmark interest rate by a quarter of a percentage point to 12.25% on 30 September 2026. It was the first rate decision under the new government of President Abelardo de la Espriella, and it takes the rate three points higher than at the end of 2025.
For readers in the United States, the move matters because it shapes returns on Colombian peso bonds and the outlook for US-listed names such as Bancolombia and Ecopetrol. Our Colombia coverage and the IMF debt mission now in Bogotá give the wider picture.
What the Central Bank Decided
Banco de la República, Colombia’s central bank, raised its main rate from 12% to 12.25%, and the new level took effect on 1 October. The decision was announced on 30 September, according to El Colombiano and Portafolio.
Four board members backed a 0.25-point rise, two voted to keep the rate unchanged and one called for 0.5 points, El Colombiano reported. Governor Leonardo Villar said price behaviour was one of the main reasons for the increase.
Why Inflation Is Back in Focus
Annual inflation stood at 6.2% in August, double the bank’s 3% target. Food prices rose 6.1%, regulated prices 6.8% and services 7.2%, while core inflation, which strips out food and regulated items, was 6.1%.
Analysts surveyed by the bank now expect inflation of 6.8% by December 2026. The board also cited the risk that the El Niño weather pattern could push food prices higher, and a tighter global financial climate.
A Slowing Economy Underneath
The economy grew 3.4% in the second quarter from a year earlier, using seasonally adjusted data. Newer figures are softer: the activity tracker rose 1.1% in July from a year earlier, and manufacturing output fell 2.3%.
Retail sales were still up 5.3% in July, and imports in dollars rose 22.3%. Finance Minister Miguel Gómez said the government shares the bank’s concern about a rebound in inflation and is closely aligned with the decision.
What Prediction Markets Say
Polymarket’s market on the Colombian central bank’s October decision, with US$51,424 traded, prices “no change” at 58.5% and a 0.25-point rise at 20.5%. It gives 9.3% to a cut of 0.5 points or more, 5.7% to a rise of 0.5 points or more and 2.9% to a 0.25-point cut (23 October 2026, 6:11 p.m. ET).
Its December market, with US$14,041 traded, prices no change at 68.5%. These prices are bets, not polls or forecasts by the bank.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for You
Higher Colombian rates tend to attract investors seeking yield and can support the peso, but we did not verify any market reaction to this decision. Holders of Colombian government bonds, emerging-market funds or Bancolombia and Ecopetrol shares in New York should watch the October meeting, which also carries a rate decision.
Borrowers in Colombia, including expats with local loans, face higher costs for now. Markets currently expect the bank to pause rather than raise again.
What Is Not Known
The bank’s own meeting minutes and the exact date of its October decision were not available to us, so we do not state a date. How quickly inflation returns toward 3% is also unclear, as the 6.8% year-end figure is an analyst expectation, not a bank forecast.
No verified reaction from the peso or the bond market to the 30 September decision is available to us.
Frequently Asked Questions
What did Colombia’s central bank decide?
It raised its benchmark rate by 0.25 points to 12.25%, announced on 30 September and effective 1 October 2026. Four of the seven board members voted for the rise.
Why did the bank raise rates?
Annual inflation reached 6.2% in August, far above the 3% target. The board also cited El Niño risks and a tighter global financial climate.
How much has the rate risen this year?
Colombia’s rate has risen three full points in 2026, from 9.25% at the end of 2025, Portafolio reported.
Will the bank raise rates again?
The board’s October meeting includes a rate decision. Polymarket traders currently price “no change” at 58.5%, a bet rather than a forecast.
Sources: Banco de la República; El Colombiano; Portafolio; Polymarket.
Further reading: Colombia Hosts IMF Debt Mission Until 29 Oct; IMF Cuts Colombia Growth Forecast to 2.2%.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error
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