Colombia's financial market anticipates that the Banco de la República will raise its interest rate at the January 30, 2026 meeting, according to a Citi survey. Out of 25 consulted entities, 17 expect an adjustment to 9.75%, while only five foresee it staying at 9.5%. This outlook is driven by the minimum wage increase and inflation projected at 5.8%.
The Banco de la República's first 2026 meeting, set for Friday, January 30, will shape first-quarter monetary policy. Financial sector expectations, gathered in Citi's January survey, point to a moderate interest rate hike from the current 9.5%.
Among 25 surveyed entities, including banks and think tanks, 17 forecast a 25 basis point increase to 9.75% to counter inflationary pressures. Only five anticipate no change. This perspective is shaped by the 23.7% minimum wage rise for 2026, exceeding business forecasts of 11% and potentially boosting internal demand while raising labor costs and consumer prices.
Inflation was initially projected at 4.3% for year-end, but the wage adjustment has raised it to 5.8%, per analysts. Anif, a think tank, supports the rise to 9.75% to curb demand momentum and prevent inflation expectation drift. On the Board of Directors' vote, Finance Minister Germán Ávila, Laura Moisá, and César Giraldo may resist a major adjustment.
Firms like Itaú and BBVA take a firmer stance: Itaú sees 10%, noting the 23% nominal (18% real) wage hike demands tighter policy. 'It is likely that the Banco de la República will harden its restrictive stance to re-anchor expectations,' said Carolina Monzón, Itaú Colombia's economic research director. By end-2026, forecasts range from 10% (Moody's Analytics) to 12.25% (BBVA), above 2025's close.
This scenario underscores the balance between economic growth and price stability in Colombia.
