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Central BanksMediumUpdated×2•Originally published 7 November 2026•Updated 7 November 2026•
2 min read

Colombia Holds Rates at 12.25% and Announces $2 Billion FX Operation

Illustration of Banco de la República building with an open vault, Colombian pesos, gold coins, and a clock.

Key Facts

1Colombia’s central bank held its policy rate at 12.25% and announced a $2 billion foreign-exchange operation.
2Core inflation in Colombia fell from 6.1% in August to 6.0% in September.
3Citi says emerging-market central banks are leaning toward tighter policy to address core inflation and high energy costs.
4Egyptian assets rallied sharply, with strong net inflows into short-dated bonds.

Colombia’s central bank kept its policy rate at 12.25% and simultaneously announced a $2 billion foreign-exchange market operation in coordination with the Finance Ministry, according to a report published by Investing.com on November 7. The moves came as Citi sees emerging-market central banks shifting toward a more hawkish stance to counter rising core inflation and persistently high energy costs. Citi said domestic demand and expensive energy inputs are adding upward pressure on prices. Its analysts warned that continued increases in energy costs could feed into later rounds of inflation, a scenario they said central banks must avoid “at any cost.” In Colombia, core inflation, excluding food and regulated prices, fell to 6.0% in September from 6.1% in August, according to the central bank.

The tightening cycle is not uniform across emerging markets. Citi expects local bond yields to diverge next year as central banks respond differently. It identified Poland and the Czech Republic as key pressure points in Central Europe, citing a resurgence of inflationary pressures in Poland and wage pressures in the Czech Republic. The firm sees favorable local-currency performance as having helped tighten monetary conditions in these markets. Differing sources of pressure mean authorities face varying conditions as they determine their responses, while local bond yields remain vulnerable to divergence, in Citi’s assessment. Colombia’s central bank said its upcoming decisions would depend on new information.

In markets, Egyptian assets rallied strongly as investor risk appetite improved after the U.S. midterm elections, with short-dated bonds recording strong net inflows, the report said. South African government bonds also outperformed alongside an improvement in global risk appetite, while the results of local general elections were still unfolding. Citi added tactical overweight cash positions in five-year Indonesian government bonds, hedged against currency risk. In South Korea, it observed renewed short-term funding pressure on companies. These moves reflect shifts in risk appetite and differing domestic funding conditions, while upcoming central bank decisions remain tied to the path of inflation and new information, according to the report and Colombia’s central bank.