UPDATE 1-Colombia's central bank hikes lending rate to 5.25 pct, in surprise move
(Adds details on auction, comment)
By Julia Symmes Cobb and Helen Murphy
BOGOTA Oct 30 (Reuters) - Colombia's central bank raised the benchmark interest rate on Friday by a greater-than-expected half point in an effort to stem rising inflation which is already well above the bank's target range, and as risks of an economic slowdown calmed.
The seven-member board decided by majority to boost the lending rate to 5.25 percent. Only one of 18 analysts in a Reuters survey earlier this week had expected a rate rise of a half point; 15 had forecast a quarter-point hike.
The policymakers also revised up the bank's estimate for expansion of gross domestic product to 3 percent from 2.8 percent, as consumer spending and industry show signs of improvement.
"Inflation expectations have increased and the risk of a slowdown in domestic demand, beyond what is consistent with the decline in national income, has slowed," the bank statement said.
The 11-hour meeting was the longest for at least a decade.
The bank also announced extraordinary measures that would help moderate "unjustified" exchange rate increases that could de-anchor inflation expectations and would help add liquidity when needed.
The bank will auction $500 million in call options if the exchange rate reaches 7 percentage points above the moving average of the last 20 days. The option would be valid for one month. Continuación...