Colombia’s Central Bank Rate Isn’t Moving — Stop Planning Like It Will
I’ve spent years watching treasurers and finance managers make the same lazy call: wait it out. Delay the refinancing, delay the investment decision, delay the pricing adjustment — all “until rates come down.” The problem in Colombia is that wait has already lasted over a year, and based on what came out this week, it’s about to last a lot longer.
What’s Actually True
On July 31, Banco de la República’s board voted, by a tight 4-to-3 margin, to hold the policy rate at 12.0% — a level we haven’t seen in 15 months. It wasn’t an easy or unanimous call: three directors wanted another 50-basis-point hike. The justification holds up: June inflation closed at 6.1%, with food prices up 6.8%, and analyst expectations for December already sitting at 6.6% — nowhere near the bank’s 3% target. Against that backdrop, “holding steady” is, in practice, still a restrictive stance.
What makes this timely is that just three days ago, on August 20, Fedesarrollo and the Colombian Stock Exchange’s Financial Opinion Survey confirmed the market has stopped pricing in any cut this year. Consensus moved from expecting 12.5% down to 12.0% held through December, and the next formal decision isn’t until September 30. There’s no rate meeting in August, no signal of a shift in September, and probably none for the rest of 2026.
What Nobody’s Telling You
This is where most coverage stops short: it argues over whether the Banrep’s call was “right” or “wrong” — President Petro said it “only leads to paralysis,” and Finance Minister Germán Ávila called it a “mistaken” decision for the country’s moment — and skips the question that actually matters for your wallet or your business: how much longer are you going to keep making financial decisions as if relief were around the corner?
Because that’s the real risk, and it isn’t monetary policy — it’s behavior. I’ve watched companies delay restructuring variable-rate debt for entire quarters “waiting for the rate to drop,” when the compounded cost ends up outweighing the discomfort of renegotiating today. I’ve watched savers leave cash sitting in low-yield accounts instead of locking in fixed-term deposit rates that, as inflation eases toward 2027, aren’t likely to reappear anytime soon.
What I’m Doing About It
My position, with what I know today, is simple: I’m treating 12% as the base case for the next twelve months, not a temporary anomaly. That changes concrete decisions. If you’re carrying variable-rate debt, this is the window to renegotiate or lock in a fixed rate — not after the market has already corrected and everyone’s trying to do the same thing at once. If you’re sitting on idle cash, a 12-to-18-month fixed deposit today locks in a return you probably won’t see again in 2027. And if you run a company’s cash flow, this is the moment to model your projections with this cost of capital as the floor, not a temporary ceiling that’s about to disappear on its own.
This isn’t about agreeing or disagreeing with the board. It’s about refusing to bet your financial plan on a prediction the market itself has already stopped making. The real question isn’t when the rate will drop — it’s whether your financial judgment is built to operate well even if it never drops as fast as you’re hoping. That’s the starting point of the Método CRITERIO — and if you want to keep sharpening that judgment daily, the ViSFI Daily Briefing exists for exactly that.
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