BOGOTA, Jan 30 (Reuters) - Colombia's central bank raised its benchmark interest rate by 100 basis points to 10.25% on Friday, its first hike in nearly three years and a larger move than most analysts
had expected, as policymakers pointed to rising inflation pressures, a sharp jump in inflation expectations and mounting fiscal and external risks.
The increase was approved by a divided seven-member board: four directors voted for the 100-basis-point hike, two voted for a 50-basis-point cut and one backed holding the rate unchanged, according to the central bank's statement.
A Reuters poll found that 15 of 26 analysts predicted a 50-basis-point hike to 9.75%, with only one predicting a 100-basis-point jump.
In its discussion, the board cited December inflation of 5.1%, slightly below end-2024, but noted that core inflation picked up to 5.02% in December, from 4.85% in November.
The central bank's long-term inflation target is 3%, plus or minus one percentage point.
Still, inflation expectations rose markedly in January, the board said. Inflation is set to end 2026 at 6.4% and 2027 at 4.8%, according to the median of a central bank poll of analysts.
The bank flagged a widening current account deficit, estimating it reached 2.4% of GDP in 2025, up from 1.6% in 2024, mainly due to faster import growth fueled by strong domestic demand alongside only modest export growth.
The statement also highlighted elevated external uncertainty, citing risks from escalating trade conflicts, U.S. migration measures, geopolitical tensions and perceptions of Colombia's sovereign risk.
Finance Minister German Avila, who is on the board, rejected the outcome in a press conference on Friday, saying inflation has come down and that economic growth was on a sustainable path.
President Gustavo Petro has repeatedly pushed to cut the rate.
(Reporting by Nelson Bocanegra; Editing by Alison Williams)
