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By Peter Murphy and Helen Murphy
BOGOTA, Feb 28 (Reuters) - Colombia held its benchmark interest rate steady for an eleventh straight month on Friday in a widely expected move to continue supporting the economy while inflation remains low.
The central bank's board voted unanimously to leave borrowing costs unchanged at 3.25 percent, the lowest rate in Latin America, in line with the estimates of all 30 analysts polled by Reuters earlier this week.
The bank shaved 200 basis points off the interest rate from July 2012 until March 2013 to boost growth and has kept it on hold since. The next move could be a rate increase as soon as April, analysts say, now inflation is creeping higher.
"Interest rates remain at levels that stimulate aggregate spending and it is hoped they will help 2014 product approach the productive capacity of the economy and that inflation converges toward the 3 percent target," the bank said in a statement following its decision.
Economist Daniel Lozano saw little change in the wording of the statement from last month, though he brought forward to April from May his prediction for the next rate move after the bank raised some of its economic growth estimates.
"The tone of the communique was neutral," said Lozano from Bogota-based brokerage Serfinco.
While inflation remains at the bottom end of the bank's 2 to 4 percent target range, economic growth has started to pick up. Consumer prices last year rose 1.94 percent, the lowest level in five decades.
The bank on Friday forecast Colombia's economy would expand between 3.7 percent and 4.3 percent in 2013 with 4.1 percent the most likely figure, slightly higher than the 4 percent it estimated earlier. It also raised its fourth quarter 2013 growth estimate to 4.6 percent from 4.5 percent.
It expects 2014 GDP expansion of 4.3 percent.
Finance Minister Mauricio Cardenas, who represents the government on the bank's policymaking board, said fourth quarter growth could bring a "nice surprise", helped by strong revenues from a surge in coffee production, good oil revenues and an absence of disruption to the coal sector in those months.
"The low inflation prints along with a moderate economic recovery during the year should provide the central bank enough leeway to keep its policy rate on hold at 3.25 percent during the first half," said Munir Jalil, an economist at Citibank in Colombia "By yearend we now expect the repo rate to sit at 4 percent."
Colombia's steady monetary policy sets it apart from other central banks in emerging markets, which in the last few months have been raising rates or selling dollars to contain an exodus of investors as currencies lost value.
Currencies tanked across emerging markets in anticipation of further withdrawal of U.S. monetary stimulus and signs that China's economy, the world's second largest, has cooled down.
Colombia's peso has weakened about 6.5 percent versus the U.S. dollar this year, and 12.9 percent over the last 12 months.
The bank has been intervening in the exchange market for more than two years to stem gains in the peso that have hurt manufacturers and exporters. At its December board meeting the bank extended its program to as much as $1 billion through the end of March.
"We are optimistic that this year with the devaluation there will be a recovery in employment especially in industry," said Cardenas. (Reporting by Nelson Bocanegra, Luis Jaime Acosta, Carlos Vargas and Monica Garcia; editing by Andrew Hay)