September 21, 2018 / 2:25 PM / a month ago

Colombia central bank seen holding rate for six months amid controlled CPI: Reuters poll

BOGOTA (Reuters) - Colombia’s central bank will hold its benchmark interest rate steady at 4.25 percent until March 2019, as inflation expectations remain contained, a Reuters poll showed on Friday.

FILE PHOTO - A general view of Colombia's central bank (Banco de la Republica) in Bogota, Colombia, May 26, 2017. REUTERS/Jaime Saldarriaga

The 16 analysts in the survey agreed that a decision to leave borrowing costs unchanged at the Sept. 28 monetary policy meeting would be a unanimous vote by the seven board members.

The key lending rate has been at 4.25 percent since April.

“We expect a procedural meeting, given that inflation remains controlled and GDP advances in a recovery mode,” said Wilson Tovar, chief economist at brokerage Acciones y Valores.

The median of the survey showed consumer price gains would end this year at 3.27 percent, a slight increase compared with the 3.24 percent from the August poll, and close to the long-term 3 percent target established by the bank.

Inflation expectations for the end of 2019 dipped to 3.20 percent from 3.30 percent in last month’s survey.

In September prices were seen up 0.18 percent, bringing accumulated 12-month inflation to 3.24 percent.

“Interest rates will remain stable as inflation and expectations don’t show a significant change,” said Fabio Nieto, analyst at Banco Agrario.

In an interview with Reuters this week, central bank board member Carolina Soto said the bank’s priority is to keep inflation under control. She said if there are no negative surprises in macroeconomic indicators, the interest rate would remain stable.

The country’s economic growth expectations for this year and next year remained stable at 2.6 percent and 3.2 percent, respectively, in the poll, compared with the August survey.

Reporting by Nelson Bocanegra; Editing by Dan Grebler

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