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The 25-point cut narrowly won the day among central bank board members with a 4-3 vote. All three dissenters preferred another 50-point reduction.

One analyst firm believes the move "to step up the pace of interest rate cuts is a clear response to the weakness of the recent activity data."

"For now, the Banco de la República is likely to continue to move in 25-basis-point steps," said Capital Economics.

The bank's second interest rate cut in three months, amid falling inflation, marks a major course change.

“We have to wait for the results of the tax reform," analyst Richard Francis told Finance Colombia in New York.

Dissenting central bank members "held that it would be prudent to keep the benchmark rates stable."

The decision was based on worries that Colombia's economic slowdown may now be a larger concern than inflation.

"The slowdown in output and lower external imbalance reflect the adjustment required in the Colombian economy," said the central bank.

This marks the second straight month with no intervention, putting a definitive end to the prior 11 months of rate hikes.

The Banco de la República had pushed the interest rate up by 325 basis points over the previous 11 months to curb out-of-control inflation.