Interest rate of the Bank of the Republic is expected to reach 12% this year and maintain a restrictive cycle
Leonardo Villar, manager of the Bank of the Republic. Photo: Courtesy - A.P.I.
TL;DR
- Itaú Colombia projects the intervention rate to reach 12% by the end of 2026.
- Core inflation remains high, forcing the Bank of the Republic to adopt a more restrictive monetary policy.
- Government fiscal policies, including increased public spending and minimum wage hikes, are seen as contributing factors to inflation.
- The nation's gross debt was near 62% of GDP in February 2026, with net debt projected around 60% of GDP for the year.
- Inflation is expected to end the year above 6%, double the target, with the minimum wage increase alone adding 45 basis points in the first two months.
- Previous promises of fuel price reductions have been short-lived.