However, analysts were split on the size of a potential cut.
Eleven of the 21 analysts surveyed forecast a 50 basis points cut, which would take the benchmark rate to 12.50%, while the other 10 analysts forecast a reduction of 25 basis points, which would put the rate at 12.75%.
The monetary policy authority began a downward cycle on Dec. 19 with a 25 basis points cut to the interest rate, which took it to 13%.
"The central bank could continue its cuts to the benchmark rate amid recent industry, commerce and construction data, which show a significant slowdown," said analyst Daniela Guio of investment management firm Fidubogota.
"Likewise, inflation has continued along a negative trend and has generated a stabilization in inflation expectations derived from the public debt market," Guio added.
While Colombia's inflation closed 2023 at 9.28%, well above the central bank's 3% target, the metric registered nine months of deceleration through the end of December.
At the same time, Latin America's fourth-largest economy contracted by 0.3% in the third quarter of 2023, which pushed the central bank's technical team to cut its growth forecast for the year to 1%, from a previous 1.2%.
Analysts' median expectation now sees the central bank's interest rate closing this year at 8.25%, up from 8% previously in December's poll. Analysts still forecast the rate to end 2025 at 5.5%.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by Jonathan Oatis)
By Nelson Bocanegra
