UPDATE 1-Colombia cenbank hikes rate to 7.75 pct to fight inflation
(New throughout, adds comment and background on inflation, GDP, adds bylines)
By Helen Murphy and Julia Symmes Cobb
BOGOTA, July 29 (Reuters) - Colombia's central bank raised its benchmark lending rate to 7.75 percent on Friday despite a still-sluggish economy, as fast-climbing consumer prices put its 2017 inflation target at risk.
The seven-member board decided to boost the lending rate by 25 basis points, the 11th consecutive monthly increase, meeting the forecast of 16 out of 22 analysts in a Reuters survey last week.
The board's decision was split as some policymakers believe the rate should have been held at 7.5 percent to allow breathing space for the economy, saying increases in consumer prices are seen as temporary.
The bank revised down its economic growth forecast for the year to 2.3 percent from 2.5 percent as low oil prices continue to drag national revenue. The government still sees expansion at 3 percent.
The market had expected the bank to pause its tightening cycle after last month, but annual inflation accelerated to an unexpectedly high 8.6 percent in June.
The increase pushed the rate up a cumulative 325 points since September in an effort to bring inflation within the bank's target range of 2-4 percent next year.
The El Nino drought, a 45-day truckers strike which ended last week, and the weakened peso currency have raised food and energy prices, sending inflationary outlooks higher. Continuación...