UPDATE 2-Colombia holds interest rate again, extends dollar purchases

viernes 21 de marzo de 2014 14:44 GYT

(Adds finance minister quote, context on rates and economy, byline)

By Peter Murphy and Nelson Bocanegra

BOGOTA, March 21 (Reuters) - Colombia's central bank on Friday held its benchmark lending rate unchanged for a 12th straight month, as expected, as it seeks to maintain monetary stimulus while inflation remains benign.

Policymakers also decided to extend the bank's dollar purchases and buy up to $1 billion through June, as they prepare for an expected rise in demand for Colombia's currency from a government push to increase international debt sales.

The board maintained borrowing costs at 3.25 percent, as forecast by all 28 analysts in a Reuters survey earlier this week, a level that has held steady for a year after a cumulative 200-basis point cut from mid-2012 to February 2013.

In its decision statement, the bank said economic growth accelerated in the second half of 2013 and inflation continued to rise in February - factors that analysts expect to lead to a rise in interest rates around June or July.

"Interest rates remain at levels that stimulate aggregate spending and hopefully allow (gross domestic) product in 2014 to approach the productive capacity of the economy as inflation converges towards the 3 percent target," the bank said.

Colombia's inflation rate is still lingering near the bottom rung of the bank's 2 to 4 percent target range with 12-month price growth of 2.32 percent through February.

Economic growth is picking up nonetheless, with expansion of 4.9 percent in the fourth quarter of last year, the government announced on Thursday, taking 2013 growth to 4.3 percent, shy of the official 4.5 percent but beating analysts' 4.1 percent view.   Continuación...