The Board of Directors of Banco de la República decided by a majority vote to increase the monetary policy interest rate by 25 basis points to 12.25%

• Headline inflation increased again in August, reaching 6.2% year-on-year. The main pressures originated from the food and regulated items, whose inflation rates stood at 6.1% and 6.8%, respectively, while services inflation rebounded to 7.2% year-on-year. Core inflation, excluding food and regulated items, increased to 6.1%, reaching its highest level in a year. The occurrence of the El Niño phenomenon could continue to place upward pressure on food and regulated-items inflation projected paths.
• According to the September survey results, inflation expectations among economic analysts for December 2026 rose again to 6.8%, while expectations over a two-year horizon fell to 4.0%. Inflation expectations derived from the public debt market remain well above the target.
• Seasonally adjusted GDP grew by 3.4% YoY in the second quarter. The Economic Monitoring Indicator (ISE for its Spanish acronym) suggests economic activity may have slowed, posting annual growth of 1.1% in July. The manufacturing industry declined by of 2.3% YoY. Total real retail sales increased by 5.3% year-on-year in July, consistent with annual growth of 22.3% in dollar-denominated imports.
• International financial conditions have become somewhat tighter amid prospects of a more restrictive monetary policy stance by central banks in advanced economies.

The decision adopted by the Board of Directors maintains a restrictive monetary policy stance, in line with expectations of a declining inflation path in 2027. Future information on the effects of El Niño, the recovery process following the earthquake, and fiscal policy measures will be central for upcoming monetary policy decisions

Press Release Conference (only in Spanish)