BanRep hawks, Colombia-US rift intensifies

The hawkish tone accompanying the Colombian central bank (BanRep)’s decision to keep its policy rate unchanged at 9.25% this week supports our view that there’s much less room for easing in Colombia than most expect. Meanwhile, Colombia-US relations took another turn for the worse, with the US revoking President Petro’s visa. The spat raises the risk of the Trump administration targeting Colombia with punitive measures, such as tariffs and sanctions, but also highlights the US's willingness to take a hard line against countries it considers adversarial (Colombia and Brazil), while supporting its allies (Argentina).