Colombia's central bank seen raising rates to hold inflation
By Helen Murphy
BOGOTA, July 31 (Reuters) - Colombia's central bank is widely expected to raise its benchmark interest rate on Thursday for a fourth straight month to keep a lid on inflation as the economy grows faster than foreseen.
Policymakers have sought to pull stimulus from the economy by boosting lending rates while keeping consumer prices within the central bank's target range of 2 to 4 percent.
The seven central bank board members will begin meeting at 8.30 a.m. local time (1330 GMT).
Of 31 analysts in a recent Reuters poll, 30 expected the bank to raise the rate by 25 basis points to 4.25 percent, while one said the bank would hold it steady at 4 percent.
"Inflation is still controlled but it could start moving up next year, so there'll be a quarter-point rise," said Washington-based strategist Pedro Tuesta at 4Cast Inc. "The bank still sees an output gap and so space for further economic growth, but I think that has now closed."
The economy has recovered this year to levels that have surprised the market, growing by 6.4 percent in the first quarter and prompting Finance Minister Mauricio Cardenas to consider raising his growth estimate for 2014 from 4.7 percent.
He has said he wants to see figures for second-quarter gross domestic product before making a decision.
Central bank policymakers could also opt to raise their estimate for 2014 economic growth from the current 3.3 percent to 5.3 percent, with 4.3 percent having been seen as most likely. Continuación...