Yes — as long as the position was opened before the 2-minute pre-news window began, you are free to hold it through the event. You can close it any time after the 2-minute post-news window has passed.
During the restricted window (2 minutes before to 2 minutes after the news release), you cannot:
Open new positions
Close existing positions
Trigger pending orders
This rule applies to all Challenge and Funded account types.