Persistent inflation pressures, with annual readings accelerating to around 6.2% in August and analyst forecasts now pointing to 6.7-7.0% by year-end 2026, remain the dominant driver of Banco de la República’s policy stance ahead of its October decision. Strong domestic demand, recent minimum-wage gains, El Niño-related supply shocks, and elevated inflation expectations well above the 3% target have kept the benchmark rate at 12% following the June 75-basis-point hike. Most surveyed economists anticipate no change at the late-September meeting, though a minority project 25- or 50-basis-point increases to further anchor expectations. The peso’s recent strength and restrictive real rates provide some offset, while fiscal deterioration and external uncertainties add to caution. Traders price limited scope for cuts until late 2027.