Banco de la República's Board of Directors (BDBR) decided by majority to increase the monetary policy interest rate by 100 basis points (bp) to 10.0%

This press release details the aspects considered by the Board of Directors in its meeting on 29 September 2022

Six Board Members voted in favor of this decision and one member voted for a 50-bp increase.

In its policy discussion, the Board considered the following elements:

  • Headline inflation in August stood at 10.8%, above the 9.9% annual figure expected by the technical staff. Core inflation (excluding food and regulated items) maintained a higher-than-estimated upward trend, reaching 6.9% per year in that month. 
  • Medium-term inflation expectations increased, posting far from the 3.0% target. As for economic analysts, Banco de la República’s monthly survey showed that between August and September, inflation expectations for the end of 2023 raised from 5.5% to 6.3%, according to the median of the sample. 
  • The pace of economic activity remained dynamic in the second quarter. Based on this, the technical staff increased the GDP growth forecast for 2022 from 6.9% to 7.8%. 
  • For the coming months, there are signs of a slowdown in the country’s productive activity. The technical staff revised its growth forecast for 2023 from 1.1% to 0.7%. 
  • Monetary policy in developed countries has become more contractionary than expected, reflected in a deterioration of global financial conditions and a significant depreciation of the Colombian peso and other currencies. Fears of a global recession have increased, thus inducing reductions in commodity prices.

With the decision adopted in today's session, the Board of Directors continues the monetary policy adjustment process that ensures a return to the 3.0% inflation target in the medium term. To this end, it will make the decisions it deems necessary, based on new information available.

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