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BBVA Research Sees Colombia's Central Bank Continuing to Lift Rates After Friday's 100bps as Aims to Tame Inflation

BY MT Newswires | ECONOMIC | 02/02/26 08:14 AM EST

08:14 AM EST, 02/02/2026 (MT Newswires) -- Colombia's central bank (BanRep), in a split decision, raised the monetary policy rate by 100 basis points on Friday, bringing it to 10.25%, said BBVA Research.

It noted that this was BanRep's first rate hike in 33 months.

The decision was based on the strong performance of the economy, the sharp increase in inflation expectations, and the deterioration in the current account, stated BBVA Research.

Inflation expectations rose sharply for both this year, to 6.4% from 4.6%, and 2027, to 4.8% versus 3.8%.

Several activity indicators and labor market figures point to a resilient economy, it added.

BanRep's policy rate is expected to continue rising at subsequent meetings, with the aim of bringing inflation back to target, predicts BBVA Research.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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