BOGOTA, Aug 29 (Reuters) - Colombia's central bank is expected to raise its benchmark interest rate by a quarter percentage point for the fifth straight month on Friday to head off inflationary pressures in an economy it says is nearing its full productive capacity.
A Reuters poll this week showed 23 of 26 analysts expect the monetary policy board to raise the lending rate to 4.5 percent which would be the highest since October 2012 as the bank eases off a long stint of monetary stimulus that has stoked growth.
"Inflation, the pace of economic growth and financial variables continue to back an increase in interest rates this month," said Julian Cardenas, strategist at the Proteccion pension fund in the second-biggest city, Medellin.
"Nonetheless, the international backdrop creates greater uncertainty that could be taken into account through a pause in increases in the intervention rate soon," he said, referring to sluggish global growth limiting demand for Colombian exports.
Colombia's inflation is expected to be close to the center of the central bank's 2-4 percent target range at around 3.3 percent in 2014, analysts forecast, a still-comfortable level but up sharply from a near 50-year low of 1.94 percent in 2013.
Growth is expected to accelerate this year to around 5 percent, the central bank forecasts, versus growth of 4.7 percent in 2013. First quarter growth surged to 6.4 percent.
Several members of the central bank board have indicated the economy is nearing its potential output, the point at which competition for productive resources begins to increase and can lead to greater inflation pressures and salary demands.
On the other hand, some board members have pointed to lower than expected oil revenues this year from a 2-3 percent decline in production so far this year that could restrict growth, as a reason to consider slowing interest rate hikes.
"What we expect is that the central bank will make increases this month and next then pause thereafter, taking account of the fact that in the second half, we will have a slower pace of growth and that the great fear of inflation has already passed," said Camilo Perez, head of research at Banco de Bogota.
The central bank's dollar purchase program was extended in late June with plans to buy up to $2 billion by the end of September, to weaken the peso. The currency has weakened about 3 percent so far this month. (Reporting by Peter Murphy)