06:57 AM EDT, 04/01/2025 (MT Newswires) -- The Board of Colombia's central bank (BanRep) kept the policy rate unchanged at 9.5% late Monday in a split decision with four in favor of maintaining stability and three in favor of a 50bps cut, noted BBVA Research.

The decision was based on inflationary and fiscal risks, as well as external uncertainty, said BBVA Research.

BanRep emphasized fiscal vulnerability as a key factor in its decision, given its potential impact on country risk and the exchange rate.

Economic growth showed signs of improvement, with the gross domestic product forecast for 2025 revised upward from 2.6% to 2.8%, driven by a better performance in Q1, pointed out BBVA Research.

Future decisions will depend on the evolution of inflation, tax revenue, and the external environment, with a possible rate cut in the coming months if significant improvements are observed, it added.