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By Peter Murphy and Nelson Bocanegra
BOGOTA, Dec 19 (Reuters) - Colombia's central bank held the benchmark interest rate steady at 4.5 percent for a fourth straight month as expected on Friday as economic growth is challenged by a sharp drop in the price of crude oil, the country's top export.
The bank will also let its longstanding dollar purchase program expire this month. The program, last renewed in September, was designed to build up foreign reserves and slow the strengthening of the peso in recent years.
The board did not adopt any other foreign exchange measures after the peso's sharp depreciation this month.
Central bank director Jose Dario Uribe said the bank would consider intervening to influence the exchange rate if the peso's price in dollar terms begins to drive up inflation disruptively.
"Colombia already has $47.5 billion in reserves and conditions in the foreign exchange market arose that translated into a sharp depreciation of the peso, for which it was considered inappropriate to keep buying dollars," Uribe said.
Colombia's economy has sustained annual growth of 4 percent or higher since 2010. Finance Minister Mauricio Cardenas said this week the government would likely cut the 2015 growth target to around 4.5 percent from 4.8 percent due to lower oil prices.
Inflation has remained within the bank's 2-4 percent range despite comparatively brisk growth which has given policymakers room to apply stimulus through lower rates to take the economy closer to its full productive capacity, a level it is now near.
A Reuters poll of analysts earlier this week forecast 2015 inflation at 3.2 percent while they expected it to reach 3.6 this year.
The bank's monetary policy board reached a unanimous decision to leave the benchmark interest unchanged. Its next rate setting meeting will take place at the end of January.
Global crude oil prices have plunged about 40 percent since June, but Colombia's oil income in dollars from January to October has fallen only 5 percent, national statistics agency data shows, as forward sales delay the impact of the fall.
The drop in oil prices has caused Colombia's terms of trade to deteriorate with imports growing more expensive, and that is negatively affecting growth, the bank said. The bank said the economic outlook for its key trade partners had worsened, which would limit demand for its exports.
Domestic demand, which has been a key driver of growth, continued strong, it said. (Additional reporting by Carlos Vargas; Writing by Peter Murphy; Editing by Meredith Mazzilli and Andrew Hay)