Colombia: CB Holds Interest Rate at 12.0%

Colombia's central bank kept its benchmark interest rate unchanged at 12.0% on July 31st. The bank noted that annual inflation rose to 6.1% in June, driven by higher food and regulated prices, while core inflation held steady at 6.0%. Inflation expectations for end-2026 and 2027 increased to 6.6% and 5.0%, respectively, with market-based expectations remaining above 6.0%. The bank also noted that economic activity strengthened in the second quarter, supported by robust services sector growth, and maintained its 2026 GDP growth forecast at 2.5%. The unemployment rate fell to 8.0% in June. A stronger Colombian peso has helped ease inflationary pressures, but risks from the Middle East conflict and a potential El Ni