Colombia’s central bank, the Banco de la República, decided to maintain its benchmark interest rate at 12% during its latest meeting. Simultaneously, the bank announced it will begin purchasing US dollars to bolster the country’s international reserves. This move aims to strengthen Colombia’s financial cushion, currently standing at $67 billion USD. The purchases will be executed through put options, a financial instrument providing the right, but not the obligation, to sell dollars at a predetermined rate. Officials hope this strategy will help mitigate external shocks and stabilize the Colombian peso. The decision to hold rates comes despite persistent inflation concerns, reflecting a focus on exchange rate management. The central bank will continue to monitor economic conditions and adjust its policy as needed.