Divergent Forecasts Ahead of Colombia Central Bank Meeting as Inflation Stands at 6.29%
Key Facts
The Colombian central bank’s decision at its October 30 meeting and its members’ vote could not be verified in the sources reviewed. The bank had listed the meeting on its schedule, but its official page still showed the policy rate at 12.25% as of October 1. The available information therefore does not establish that the bank held rates at that level at the meeting, nor does it establish a split among board members. Forecasts published before the meeting point to differing analyst views on the next move. This comes as the bank faces inflation above its target, while signs of slowing economic activity are awaited.
The latest officially documented change was a 25-basis-point increase in the policy rate on September 30, bringing it to 12.25%. The Central Bank of Colombia said its board had made the decision “by majority vote,” with the new rate effective October 1. Thus, 12.25% was the announced policy rate before the October 30 meeting, not a documented outcome of that meeting. This background matters in reading the analyst poll, because one option was to hold the rate at its existing level. The poll’s more likely alternative was another increase of 25 basis points.
A Reuters poll showed that 17 of 31 analysts expected a 25-basis-point rate increase to 12.5%. One analyst expected a larger increase of 75 basis points, which would take the rate to 13%. By contrast, 13 analysts favored holding the rate at 12.25%. Forecasts were thus split between a modest increase, a steeper increase expected by one analyst, and a hold; they remain pre-meeting expectations and do not reveal the board’s decision. Reuters reported from the poll that “the remaining 13 analysts said the bank would leave the rate unchanged at 12.25%.”
Price data show why inflation remained central to forecasts: Colombia’s annual inflation reached 6.29% through September, more than double the central bank’s 3% target. Reuters said the country was on track to miss its target for a sixth consecutive year. These figures put prices above the stated target, while September’s decision had raised rates to 12.25%. But the available sources do not attribute a specific rationale for an October decision to the board, nor confirm how members weighed inflation against growth. Inflation recorded through September therefore remains pre-meeting context, not an account of the motives behind an unverified decision.
On economic activity, the Central Bank of Colombia said annual economic growth was likely to have slowed in the third quarter compared with the previous quarter, amid weak consumption and limited readings from productive sectors. Third-quarter economic performance figures were scheduled for mid-November, and Reuters expected them to show signs of a slowdown. This provides a counterpoint to high inflation, but does not establish that slower growth caused the October decision or shaped board members’ votes. Investors are awaiting the data for more detail on economic performance during the quarter. The bank also set November 4 as the publication date for its October monetary policy report.
The bank’s schedule does not include a monetary policy meeting in November, while Reuters said policymakers would vote on interest rates in December. According to published information, the next vote is therefore set for the final month of the year. Between the activity data scheduled for mid-November and the monetary policy report on November 4, the outlook remains tied to what those releases reveal about the economy and inflation. Until an official, documented statement on the October 30 decision is published, it is not possible to determine what the board chose or how its members voted.