High inflation and pressure on services would force the Bank of the Republic to maintain high rates in April
The country faces a fiscal crisis not seen since the last century. Photo: Image generated with artificial intelligence.
TL;DR
- Most market analysts expect the Bank of the Republic to raise interest rates again on April 30th.
- Persistent inflation, especially in the services sector, is the primary driver for the expected rate hike.
- The minimum wage increase is significantly impacting service prices and contributing to inflation.
- Market expectations for inflation in April and year-end 2026 have been revised upwards.
- The Bank of the Republic aims to maintain a restrictive monetary policy for an extended period to control inflation and preserve credibility.
- Global factors like rising energy prices and geopolitical tensions also influence monetary policy decisions.
- The deteriorating fiscal scenario in Colombia adds further pressure on inflation expectations and financing costs.