BOGOTA, May 13 (Reuters) - Policymakers on Colombia’s central bank board will raise the benchmark interest rate to 7.25 percent at their meeting this month, a last increase in a lengthy tightening cycle, according to a central bank survey of analysts released on Friday.
The seven-member board will increase the rate by 25 basis points, and hold borrowing costs until November, before gradually lowering the rate, the survey of 40 analysts said.
The board has raised the rate for eight consecutive months in a bid to tame inflation, which is running at about double the upper end of the bank’s long-term 2 percent to 4 percent target range.
Policymakers surprised the market in April by raising the rate an unexpected 50 basis points.
Those surveyed estimate inflation will end this year at 6 percent and 2017 at 4 percent, coinciding with recent predictions by the bank’s technical team.
Consumer prices will be 0.40 percent in May, the poll said. Inflation was 0.50 percent in April, pushing 12-month prices to 7.93 percent.
Board members have routinely cited sharp increases in food prices, a drought caused by the El Nino weather pattern, and the weakening of the currency as reasons for the 250 basis point hike, especially as economic growth concerns have eased. (Reporting by Nelson Bocanegra and Julia Symmes Cobb; Editing by David Gregorio)