BOGOTA, March 24 Colombia's central bank is
likely to cut the key interest rate a quarter point for a second
consecutive month at its meeting on Friday as policymakers seek
to bolster economic growth as inflation expectations fall.
The board, which this month will comprise six instead of the
usual seven members, will likely reduce borrowing costs to 7
percent, meeting expectations of 13 out of 14 analysts in a
Reuters survey last week. One of those polled expects a half
It would be the third rate cut since the bank started a
trimming cycle in December.
Policymakers hope the rate cuts will help the economy pick
up speed amid weak production and consumption figures in Latin
America's fourth-largest economy.
"The recent pulse of the economy shows a dangerous cooling
that requires support from the central bank to recover," said
Wilson Tovar, head economist of the Acciones y Valores
brokerage. "It's necessary to up the pace, knowing that the
effects of monetary policy implemented today will appear in four
to eight quarters."
Board members have enough space to relax their position,
analysts said, given the significant easing of inflation.
Despite the decrease, consumer price expectations are still
above the long-term target of 2 percent to 4 percent, and a
decision to lower the rate is unlikely to be unanimous.
Consumer prices rose 1.01 percent in February, taking
cumulative 12-month price growth to 5.18 percent.
Last week, the International Monetary Fund revised down its
growth projection for the Andean country to 2.3 percent from 2.6
percent, and below the government's 2.5 percent target.
Only six out of the usual seven policymakers will attend
Friday's meeting, as new board member Jose Antonio Ocampo has
not yet officially taken up his post.
(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb;
Editing by Bernard Orr)