BOGOTA, Nov 11 (Reuters) - Some members of Colombia central bank board believe there is a “high” risk inflation in 2017 will not fall to within the bank’s long-term target range, minutes from the bank’s October meeting released on Friday said, as consumer prices continue to ease from highs of nearly 9 percent.
The seven-member board voted unanimously to maintain the lending rate at 7.75 percent for a third time last month, after raising it 325 basis points over the course of a year to battle inflationary pressure.
At the time, policymakers said prices will probably continue to recede now that a prolonged drought, truckers strike and currency depreciation, which lead to spikes in inflation, have eased. Twelve-month inflation figures reached 8.97 percent in July, but were down to 6.48 percent in October.
The bank’s long-term target range is between 2 percent and 4 percent.
“According to what modeling shows, and not yet taking into account the effects of tax reform, there is still a high risk of not getting to the superior limit of the target range in 2017,” the minutes said, adding that moving the figure to within the range is the “principal challenge” of Colombian monetary policy.
The government has said inflation will close this year at 5.8 percent, while the bank projects 6.1 percent. Those figures would make 2016 the second year in a row inflation has been above the target range.
Board members “maintain that stability in the rate is still required, in the sense that a firmer anchoring of the expectations to the target is necessary,” the minutes added. (Reporting by Nelson Bocanegra and Julia Symmes Cobb; Editing by David Gregorio)