Colombia’s peso traded as strong as 3,269 per U.S. dollar on Thursday, Oct. 1, after the central bank raised its benchmark rate to 12.25%, while officials held separate technical talks with the International Monetary Fund about possible support for a fiscal adjustment. No IMF loan, credit line or programme was agreed.
Rates and the peso
The Banco de la República raised its policy rate by 25 basis points on Wednesday, Sept. 30, from 12% to 12.25%. Most analysts had expected the bank to hold rates. Four of its seven board members backed the increase, two voted to hold and one supported a half-point hike. Finance Minister Miguel Gómez cast his first rate vote as a board member.
The official reference rate on Oct. 1 was 3,312.84 pesos per dollar, down from 3,341.23 a day earlier. La República reported a morning trading range of 3,269 to 3,346, with about US$793 million traded. Its late-morning quote was 3,300.39; Portafolio reported 3,303.88.
La República and Portafolio linked the peso’s gains directly to the rate decision. Higher local rates make peso deposits and bonds more attractive to foreign investors. The exchange-rate move affects households and businesses differently: people earning dollars receive fewer pesos when converting them, while peso earners can face lower costs for imported goods and travel. Higher rates also make borrowing more expensive.
The peso had weakened earlier in September. Portafolio reported that the dollar rose 3.40% against the peso from Sept. 18 to 25, moving from 3,183 to 3,291. La República’s comparison of reference rates found that a U.S. trip cost 14.3% less in pesos than a year earlier.
Factories strengthen as borrowing costs rise
Colombia’s Davivienda Manufacturing PMI climbed to 54.6 in September from 54.3 in August, S&P Global reported on Oct. 1. A reading above 50 signals improvement from the prior month. The result was the strongest since October 2025 and the fifth consecutive monthly increase in output.
S&P Global compiles the monthly survey of about 350 manufacturers for Banco Davivienda, which describes itself as Colombia’s second-largest bank by loans. The survey covers orders, output, employment, delivery times and stocks. Its long-run average since 2015 is about 50.9; the index stood at 52.0 in September 2025 and 50.8 in April 2026.
New orders grew at one of the strongest rates recorded since the survey began in April 2011. Firms reported new customers and larger orders from existing clients. Many attributed orders to “reduced market uncertainty following the election result,” S&P Global wrote. President Abelardo de la Espriella took office on Aug. 7.
Manufacturers increased purchasing at the fastest rate on record. Companies sold goods from warehouses to meet demand, and finished-goods stocks fell. Employment rose for a sixth consecutive month, mainly through temporary hires, although the pace eased to a four-month low. Business confidence reached its highest level since July 2019.
IMF contacts remain preliminary
IMF deputy managing director Nigel Clarke met Vice President José Manuel Restrepo, Finance Minister Miguel Gómez and central bank governor Leonardo Villar in Bogotá from Sept. 25 to 28. The government had asked the Fund to bring forward its routine annual review. The sides opened technical working sessions on possible Fund support for a fiscal adjustment, and Clarke called the discussions “very productive and frank.” Whether the contacts will lead to a formal programme, or on what terms, remains unclear.
Davivienda’s chief of economic research, Germán Cristancho, called manufacturing momentum “outstanding” and its resilience “particularly interesting” amid “the moderation currently observed in other areas of the economy.” He cited retail sales and credit disbursements. The report cautioned that the PMI doesn't establish that the whole economy is booming or guarantee factory momentum will continue as higher rates take effect. Retail sales and credit were moderating, and the next PMI was due in early November.