In a split decision, Colombia's central bank, Banco de la República, left its benchmark interest rate unchanged at 7.5%, citing higher inflation expectations and an uncertain global economic environment.
Four directors at the bank's seven-member board voted to hold the rate steady, while the remaining three voted to lower the rate by 25 basis points.
Analysts had expected a 25-basis-point rate cut, in line with the similar cut made at the bank's last meeting in December 2016. However, "uncertainty about international financial and commercial conditions has increased since the board's last meeting, with a possible impact on global interest rates and the dollar exchange rate," the bank said in a statement.
In light of "higher inflation expectations, greater global uncertainty and the behavior of internal demand," the central bank board said it decided to hold rates while it "waits for new information."
Economic growth has been weaker than expected and inflation continues to slow, although inflation expectations remain above its 3% target, the bank noted.
Inflation in December 2016 cooled to 5.75% from 5.96% a month earlier, marking the fifth consecutive month of slower price gains. Analysts expect inflation of 4.25% in 2017 and 3.59% in 2018. A sharp depreciation of the peso had affected prices, but the impact has continued to fade, the central bank noted.
Economic conditions improved during the fourth quarter, but still showed "little dynamism," Banco de la República said, forecasting that 2016 GDP growth would end at between 1.8% and 2%, and that 2017 growth would be about 2%.