Colombia's Central Bank Keeps Interest Rate at 9.25% in Second Meeting Amid Finance Minister and Petro Criticism, Tax Reform Debate

The Banco de la República of Colombia decided to keep its key interest rate unchanged at 9.25% for the second consecutive meeting. The decision was divided among the board members, with four voting to maintain the rate, two advocating for a 50 basis points cut, and one supporting a 25 basis points reduction. The government, represented by Finance Minister Germán Ávila, expressed disagreement with maintaining the intervention rate and proposed lowering it to better address economic dynamics. President Gustavo Petro criticized the central bank's decision to hold the rate steady for August, despite the bank considering the complex external financing conditions facing the country. Meanwhile, the Petro administration aims to close its term with the highest tax reform in Colombia's history, although the proposal faces a challenging debate in Congress.