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BOGOTA, March 24 (Reuters) - Colombia's central bank cut its key interest rate a quarter point for a second consecutive month at its meeting on Friday, as policymakers decided a boost to consumer confidence and the sluggish economy is needed even with still-high inflation.
The board, which comprised six instead of the usual seven members, reduced borrowing costs to 7 percent, meeting expectations of 13 out of 14 analysts in a Reuters survey last week.
In a split vote, four policymakers called for the 25 basis-point reduction, while one wanted a bigger push to the economy with a 50 basis-point cut. One board member voted to hold the rate at 7.25 percent to assure inflation is "under control."
It was the third rate cut since the bank started a trimming cycle in December.
Most of the policymakers hope that lowering borrowing costs will help the economy pick up speed amid weak production and consumption figures in Latin America's fourth-largest economy.
"Recent indicators of economic activity such as retail sales, industrial production and consumer confidence suggest a weakening of the economy in the first quarter of the year," the statement said.
"The effects of the strong supply shocks that diverted inflation from the target continue to be diluted. This is indicated, for example, by the deceleration of food prices in February."
Board members have enough space to relax their position, analysts said, given the significant easing of inflation.
Despite the decrease, consumer price expectations are still above the long-term target of 2 percent to 4 percent, and Friday's split vote indicates there is unlikely to be a unanimous decision in the near future.
"I personally consider that the interest rate should fall faster because the economy needs that stimulus for consumption, for investment," said Finance Minister Mauricio Cardenas, who represents the government on the board.
Consumer prices rose 1.01 percent in February, taking cumulative 12-month price growth to 5.18 percent.
"The recent pulse of the economy shows a dangerous cooling that requires support from the central bank to recover," said Wilson Tovar, head economist of the Acciones y Valores brokerage. "It's necessary to up the pace."
Last week, the International Monetary Fund revised down its growth projection for the Andean country to 2.3 percent from 2.6 percent, and below the government's 2.5 percent target.
Only six out of the usual seven policymakers attended the meeting as new board member Jose Antonio Ocampo will take up his post in May. (Reporting by Helen Murphy; Editing by Julia Symmes Cobb and Chizu Nomiyama)