LatinNews Daily - 01 October 2026

*Colombia’s central bank (Banrep) has raised its benchmark interest rate by 25 basis points to 12.25%. This was the first increase to the rate since June, when it was hiked by 75 basis points. The interest rate is now at its highest since March 2024. In a statement explaining the decision, Banrep noted that annual inflation rose to 6.2% in August, up from 6.0% in July and above the target of 3%. Economists surveyed by Banrep predicted that this would rise to 6.8% by the end of 2026, before falling to 4.0% over the next two years. Banrep also highlighted that, whilst GDP grew by 3.4% in the second quarter, economic activity slowed to 1.1% in July, down from 3.5% in June, with manufacturing dropping by 2.3%. On the other hand, retail sales increased by 5.3%. In addition to global financial pressures, Banrep said that its next monetary policy decision would take into account the El Niño climate phenomenon, the recovery process following the August earthquake in western Colombia, and the government’s fiscal policies.

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