(Bloomberg) -- Colombia’s central bank held interest rates at a quarter-century high, defying government pressure and flouting a regional trend for lower borrowing costs. 

The bank’s board voted five to two to leave the benchmark rate at 13.25% at its September board meeting, Governor Leonardo Villar told reporters on Friday. The decision was in line with expectations.

“The majority of the board considers that, with the available information, it isn’t prudent to start a process of cutting interest rates, the sustainability of which would face important risks,” Villar said, reading the bank’s statement. 

With the economy cooling rapidly, Colombia’s Finance Ministry, top bankers and industrialists all called on Banco de la República to cut the rate this month, while President Gustavo Petro said it will do “great economic damage” if it isn’t lowered. 

Read more: Colombia Finance Chief Backs Business Leaders Who Want Rate Cuts

But Colombia still has faster inflation than peers, and policymakers are concerned that it’s taking far too long to converge to its 3% target. As growth and price pressures cool across the region, Brazil, Chile and Peru as well as Costa Rica, Uruguay, Paraguay and the Dominican Republic have started to ease monetary policy.

Policymakers will start to lower borrowing costs next month, with a quarter percentage-point cut, according to a economists surveyed by the central bank. 

Annual inflation slowed to 11.4% last month, which is the highest rate among major inflation-targeting economies in the Americas. The bank is monitoring the possible inflationary impact of the El Nino weather phenomenon and the government’s decision to phase out fuel subsidies. 

The economy will expand 1% this year, from 7.3% in 2022, according to the bank’s forecast.

The other major Latin American economy that is declining to cut borrowing costs is Mexico, which on Thursday left its benchmark rate at 11.25%. 

Read more:  Banxico Holds Rate, Sees More Inflation With No Cuts on Horizon

--With assistance from Rafael Gayol.

(Adds bank’s comment in 3rd paragraph)

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