Colombia's central bank holds policy rate at 12% amid persistent inflation
The Board of Directors of the Banco de la República voted 4‑3 to keep the policy interest rate unchanged at 12 % in its July 31, 2026 meeting. The decision was taken despite a rise in inflation expectations and an annual consumer‑price inflation rate of 6.1 % in June, driven mainly by food price inflation of 6.8 % and regulated‑goods inflation of 5.9 %. Unemployment remained at 8 % and economic activity showed modest improvement, but the central bank judged that a restrictive stance was still needed to bring inflation back toward its 3 % target.
President Gustavo Petro publicly urged the central bank to cut the rate by at least two percentage points, accusing it of contributing to the peso’s revaluation. The bank, however, emphasized that inflation expectations had risen to 6.6 % for December 2026 and 5 % for 2027, reinforcing its view that maintaining a tight monetary policy was essential.
Entities: Banco de la República · Central Bank of Chile · Central Bank of the Dominican Republic · Colombia · Germán Ávila · Gustavo Petro · Leonardo Villar · US$4 billion reserve program
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [● 2 SOURCES] Finance Minister Germán Ávila said further rate cuts are needed to avoid significant recessionary consequences. (Germán Ávila)
- [● 5 SOURCES] June inflation in Colombia was 6.1% year‑on‑year. (existing)
- [● 5 SOURCES] Unemployment in Colombia fell to 8.0% in June. (existing)
- [● 5 SOURCES] Food price inflation was 6.8% and regulated‑goods inflation 5.9% in June. (existing)
- [● 8 SOURCES] The vote on the rate decision was 4 in favor of maintaining and 3 for a 50‑basis‑point increase. (existing)
- [● 5 SOURCES] Banco de la República announced a program to purchase up to US$4 billion of foreign reserves via auctions starting August 2026. (Banco de la República)
- [DISPUTED] President Gustavo Petro’s administration pressured the board to keep the rate unchanged. (Report on political context)
- [● 6 SOURCES] Banco de la República kept the policy interest rate at 12% on July 31, 2026. (new)
- [● 6 SOURCES] Banco de la República kept the policy interest rate at 12.0% on July 31, 2026. (Banco de la República)
- [DISPUTED] President Gustavo Petro demanded a reduction of at least two percentage points in the policy rate. (new)
- [● 4 SOURCES] Inflation expectations rose to 6.6% for December 2026 and 5% for 2027. (new)