Colombia Another surprise from BanRep: A pause and FX intervention program

Research evidence excerpt

Colombia Another surprise from BanRep: A pause and FX intervention program

J P M O R G A N Latin America Economic Research

31 July 2026

Colombia

Another surprise from BanRep: A pause and FX

intervention program

BanRep’s reaction function has been difficult to decipher this year, to say the least. Economic and Policy Research

At the June meeting—held after the election outcome, the compression in risk Diego W. Pereira

premia, and the sharp peso appreciation—the Board surprised markets with a (1-212) 834-4321

hawkish 75 bp hike. Today, by contrast, the Board delivered a dovish surprise, diego.w.pereira@jpmorgan.com

which appears closely tied to recent FX dynamics. J.P. Morgan Securities LLC

Juan Goldin

The Board left the policy rate unchanged at 12% and announced a program to (57 601) 869 8746

juan.goldin@jpmchase.com

accumulate up to US$4bn in FX reserves. Four Board members voted to hold rates, BANCO J.P. MORGAN COLOMBIA S.A

while three favored a 50 bp hike. In effect, the long-standing split between the

orthodox and heterodox camps has softened, with the majority now converging

around a more cautious stance. This outcome was enabled by two members who

had previously argued for cuts moving to an on-hold position, alongside the

decision of one member of the orthodox bloc to also vote for a hold rather than the

50 bp hike favored by the rest of that group.

The statement nonetheless underscored persistent inflation pressures and

inflationary risks. Headline inflation rose to 6.1%oya in June, driven by food and

regulated prices, while core inflation excluding food and regulated items remained

unchanged at 6.0%oya. The Board also acknowledged a renewed increase in

inflation expectations. According to the July analyst survey, year-end inflation