In Colombia, the central bank board is likely to resume reducing its benchmark interest rate with the backing of new board members, despite inflation challenges and a challenging fiscal outlook. A recent survey of 21 analysts conducted by Reuters indicated that most expect a 25-basis-point rate cut to 9.25%, while a few foresee a larger 50-basis-point cut to 9.00%. The arrival of new members on the board and a new finance minister could alter the balance of decision-making and monetary policy expectations in the country, according to investment holding company Corfi.

The upcoming vote will be the first on interest rates for Laura Moisa-Elicabide and Cesar Giraldo, appointed to the seven-member board by President Gustavo Petro, as well as for new finance minister German Avila, who expressed support for a rate cut. However, some analysts suggest that there is a possibility the board may choose to keep the rate unchanged.

Factors such as the challenging fiscal situation, rising inflation, and cautious monetary policies in the US and the region could prompt a decision to maintain the current rate, as noted by Alianza brokerage. In January, the board opted to maintain the rate after a series of rate cuts that began in December 2023.

Based on the Reuters survey, analysts predict the benchmark rate will conclude this year at 7.75%, a higher projection compared to the previous survey's 7%.

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