(Adds comments about inflation, interest rates, context)
BOGOTA, Aug 18 (Reuters) - Colombia’s central bank board will continue to lower the benchmark interest rate in a bid to boost economic growth, central bank chief Juan Jose Echavarria said on Friday, though the margin for further cuts is closing.
The board has been grappling for more than two years with the pressures of a weak economy, caused by the global drop in oil prices, and high inflation that in July 2016 reached almost 9 percent.
Cuts to the interest rate, which total 225 basis points since the trimming cycle began in December, left borrowing costs at 5.50 percent last month.
“Our margin to be able to lower the rate is closing, because our target is 3. Not 4,” Echavarria said during the bank’s quarterly inflation presentation. “They are still high rates.”
The Andean country’s economy will grow between 2.5 percent and 3 percent next year, he said.
Echavarria added he hoped inflation would end this year just within the central bank’s target range of 2 percent to 4 percent.
“We will end the year, hopefully, at 3.9 percent.” Consumer price increases at that rate would be “very good news,” he said.
The central bank’s technical team anticipates growth of between 1.6 percent and 1.8 percent for 2017. The economy grew 1.3 percent in the second quarter, the government said on Tuesday, slightly less than expected by the market.
“It’s possible we are touching bottom, we are still growing at very low rates,” Echavarria said. “Next year we could grow between 2.5 and 3.”
Long-term growth will be between 3 percent and 3.5 percent, the bank chief added.
Reporting by Julia Symmes Cobb, Nelson Bocanegra and Carlos Vargas; Editing by Diane Craft