Colombia central bank minutes show concern about 2017 inflation target
BOGOTA, July 8 (Reuters) - Some members of Colombia's central bank board warned that "great volatility" overseas and persistent price increases may put the 2017 inflation target at risk, the minutes of the last monetary policy meeting showed on Friday.
The seven member board voted by majority in June to raise the benchmark lending rate for a tenth straight month as stubbornly high inflation continued to hit more than double the 2-4 percent target range set by the bank.
Twelve-month inflation was 8.20 percent through May - data used during the meeting - as food costs and a depreciation of the peso currency continued to pressure consumer prices.
The bank lifted lending rates a quarter point to 7.5 percent, leaving it 300 points higher than in September.
"Some members who voted for the rate rise thought that great volatility overseas and signs of persistent high inflation present a serious threat to meeting the bank's long-term inflation," the minutes said.
Analysts said the tone of the minutes read as though more tightening could be on the cards.
"Until the bank can ensure and clearly see that inflation will change its tendency it doesn't want to risk giving a different message," said Juan David Ballen, analyst at brokerage Casa de Bolsa.
Still, one board member, leery of stunting economic growth, voted to hold the rate, arguing that the previous nine months of monetary tightening had achieved the goal of easing inflationary pressure and internal demand is "adjusting at a convenient rhythm".
Finance Minister Mauricio Cardenas, who represents the government on the board, told journalists at the time that June's hike would mark the end of the cycle. Continuación...