LatinNews Daily - 01 April 2026

*Colombia’s President Gustavo Petro has criticised yesterday’s decision by the central bank (Banrep) to raise the benchmark interest rate by 100 basis points to 11.25%. The decision divided Banrep’s directors, with four voting for the increase, two voting for a cut of 50 basis points, and one voting to leave the rate unchanged. This followed a previous increase of 100 basis points in February, which came after interest rates had been held at 9.25% since April 2025. A statement explaining the decision noted that annual inflation stood at 5.3% in February, down slightly from 5.4% in January but up from 5.1% in December 2025 and above the target rate of 3%. Annual inflation is expected to hit 6.3% by the end of 2026. The statement noted that “the war in Iran jeopardises the growth and stability of the global economy” and predicted that “its effects on the Colombian economy will be mixed” with the country set to benefit from higher prices for exported oil but also facing higher inflation caused by rising prices for gas and fertilisers, for which Colombia is largely dependent on imports. Responding to the rate hike, President Petro accused the bank of “killing the Colombian economy”. The finance minister, Germán Ávila Plazas, who reportedly walked out of a meeting with Banrep’s directors yesterday due to disagreements over the interest rate, said that “inflation is not being caused by the effects of demand, but by supply shocks [at the global level]… due to the increase in the price of fuel… so the monetary policy measures that they’re trying to introduce to manage those supply shocks are absolutely useless and are only increasing the cost of production”.

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