UPDATE 2-Colombia central bank holds benchmark interest rate steady

miércoles 24 de junio de 2015 16:18 GYT
 

(Adds eyes on U.S. monetary policy, trade, paragraphs 9-12)

By Peter Murphy and Helen Murphy

BOGOTA, June 24 (Reuters) - Colombia's central bank held its benchmark interest rate for a 10th consecutive month on Wednesday, as policymakers grappled with the twin constraints of inflationary pressure and an economy weakened by the drop in global oil prices.

The seven-member board voted unanimously to maintain the lending rate at 4.5 percent, meeting the forecast of all analysts in a Reuters survey this week.

Inflation has exceeded the bank's target of 2-4 percent since February, though the board expects it to come back within the range this year.

The board cited slightly easing inflation, slowing domestic demand, an expected slackening in the pace of investment and falling unemployment as key factors influencing its decision.

"The slowdown that began in late 2014 continued in 2015," the bank said in its statement. "Inflation fell and expectations remain close to 3 percent. Domestic spending in the economy continues its adjustment process due to the lower dynamic of national income."

Economic growth is likely to slip below 4 percent this year for the first time since 2009, while inflation has hovered above the upper limit of the central bank's 2 percent to 4 percent target range since February, limiting policymakers' options.

Inflation was running at 4.41 percent in May while in that month in 2014, it was 2.93 percent.   Continuación...