Colombia Raises Its Policy Rate to 12.25%: What Expats and Savers Need to Know
COLOMBIA · ECONOMY · COST OF LIVING
Key Facts
- —The decision Colombia’s central bank, the Banco de la República, raised its policy interest rate by 25 basis points to 12.25 percent on Wednesday 30 September, in a majority decision — against the market consensus, which had expected an unchanged 12 percent.
- —The peso The official TRM is certified at 3,312.84 pesos per dollar for Thursday 1 October, firmer than Wednesday’s 3,341.23 and Tuesday’s 3,349.63 — two stronger days running. US$1,000 buys COP 3,312,840 at the TRM.
- —The backdrop Annual inflation has stayed above the bank’s 2-to-4-percent target range all year and has run above 6 percent since mid-year — 6.1 percent in June and 6.2 percent in August, the latest print, with services inflation at 7.2 percent.
- —What it means for you Loans, credit cards and mortgages get more expensive with a lag; term deposits and savings rates improve. If you earn in dollars, a firmer peso means each transfer buys fewer pesos than last week.
- —What comes next The minutes of Wednesday’s decision — including the vote split — are due on Monday 5 October. The next rate meeting is 30 October.
- —The split Four directors backed the 25-point rise, two voted to hold at 12 percent and one wanted a 50-point rise — a divided board, per the bank’s own statement.
- —Still open Whether this is a one-off warning or the start of more hikes. The full minutes land on Monday 5 October.
Colombia’s central bank did on Wednesday what almost nobody expected: it raised rates. The 25-basis-point move to 12.25 percent breaks a hold that had stood since July — and it landed while the peso was already firming.
What the Board Decided
The Banco de la República’s seven-member board, chaired by Governor Leonardo Villar, voted on Wednesday 30 September to raise the monetary-policy rate by 25 basis points, from 12 percent to 12.25 percent. The split shows a divided board: four directors backed the 25-point rise, two voted to keep the rate unchanged, and one wanted a 50-point increase, according to the bank’s statement, published the same day.
The rate had stood at 12 percent since 1 July. That level itself was the product of an unusually aggressive year: the board raised by 75 basis points to reach 12 percent in late June, with four directors in favor, two preferring a 50-point cut and one for a hold. The year’s cumulative tightening now stands at 300 basis points.
Why It Surprised
The consensus going in was a hold. The August edition of the Encuesta de Opinión Financiera — the Fedesarrollo and stock-exchange survey that serves as the market’s reference — showed analysts expecting the rate to stay at 12 percent through year-end. Nothing in the public record ahead of Wednesday’s meeting signaled a move, and the board had paused in July precisely to assess whether the earlier hikes were working.
The board’s published reasoning has turned on persistence: annual inflation rose again to 6.2 percent in August, from 6.1 percent in June, against a 2-to-4-percent target range, with services inflation at 7.2 percent and expectations still above target at all horizons. The full argument for Wednesday’s move will be visible in Monday’s minutes.
The Peso Moved the Other Way
Rate hikes usually support a currency, and this week Colombia’s peso barely needed the help. The Superfinanciera’s TRM — the official reference rate — is certified at 3,312.84 pesos per dollar for Thursday 1 October, from 3,341.23 on Wednesday and 3,349.63 on Tuesday: two firmer days running, though the peso remains weaker than it was earlier in the month. An overnight market estimate (open.er-api.com, 00:02 UTC Thursday) sits near 3,334 — an estimate, not the certified rate.
For practical conversion: US$1,000 buys COP 3,312,840 at the TRM, and a COP 3,000,000 rent works out to about US$906. Two firmer days have quietly made dollar-funded life in Colombia a little more expensive in peso terms.
What This Means for Expats
Borrowing. Mortgage, consumer and card rates in Colombia reference the central bank’s stance through the DTF and IBR indexes; a higher policy rate feeds through to new loans first and to existing variable-rate credit with a lag. If you were weighing a peso loan or a property purchase on credit, price it again.
Saving. The flip side: term deposits (CDTs) and savings products tend to follow the policy rate up. Shop the rate before renewing.
Converting. The stronger peso cuts both ways. Dollar earners get fewer pesos per transfer — US$1,000 now converts to about COP 37,000 less than it did at Tuesday’s rate. Peso earners with dollar obligations get relief.
The frame. The hike lands while the government is in early talks with the IMF — opened by the president on Sunday — and while Bogotá’s new tax reform, worth about US$324 million a year, moves through implementation. The central bank is signaling it will defend the inflation target even against the grain of politics.
What Is Not Yet Known
Whether 12.25 percent is the end of it. The split — four for the rise, two for a hold, one for a 50-point increase — shows a board arguing about speed, not direction, and Monday’s minutes will reveal how much weight each side gave to August’s 6.2 percent inflation print versus the peso’s recent firmness, which some directors have previously flagged as a reason not to raise. Until then, any account of the internal debate beyond the vote count is inference.
Did Colombia raise or hold its interest rate on 30 September?
Raised. The Banco de la República’s board voted on Wednesday 30 September 2026 to lift the policy rate 25 basis points, from 12 percent to 12.25 percent. The market consensus — the Fedesarrollo and stock-exchange survey — had expected a hold at 12 percent. Four directors backed the rise, two voted to hold and one wanted a 50-point increase; the minutes are due Monday 5 October, and the next rate meeting is 30 October.
What is the dollar worth in Colombia today?
The official TRM is certified at 3,312.84 pesos per dollar for Thursday 1 October — firmer than 3,341.23 on Wednesday and 3,349.63 on Tuesday. US$1,000 buys COP 3,312,840 at the TRM; a COP 3,000,000 rent is about US$906. The TRM is set by the Superfinanciera from Wednesday’s market and applies to Thursday’s transactions.
Will loans and mortgages get more expensive in Colombia?
Yes, with a lag. New peso loans price off indexes that track the policy rate, so the 25-basis-point rise to 12.25 percent shows up first in fresh credit offers, then in variable-rate products. Term deposits and savings rates tend to improve in step. If you are mid-negotiation on a mortgage or car loan, re-quote before signing.
Sources
- Banco de la República (press release, 30 September 2026: policy rate raised 25 bp to 12.25 percent; vote split four for the rise, two for a hold, one for +50 bp; August annual inflation 6.2 percent, services 7.2 percent; minutes due 5 October; next meeting 30 October 2026)
- Banco de la República (June 2026 decision and July 2026 minutes: rate path, June inflation 6.1 percent, earlier vote splits)
- Superfinanciera de Colombia via datos.gov.co (TRM 3,312.84 valid 1 October; 3,341.23 valid 30 September; 3,349.63 valid 29 September 2026)
- Valora Analítik, Fedesarrollo–bvc Encuesta de Opinión Financiera, August 2026 edition (consensus hold at 12 percent)
- open.er-api.com (Colombia market estimate, 1 October 2026, 00:02 UTC — labeled estimate)
- The Rio Times desk reporting, 28 September–1 October 2026
More: Colombia news in English, every day from The Rio Times. See also our LatAm Expat & Nomad Daily Guide for Thursday, October 1 and the earlier Colombia IMF talks standalone.
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