(Adds quotes, details of statement)
BOGOTA, June 21 (Reuters) - Colombia’s central bank held its benchmark interest rate steady at 4.25% at its meeting on Friday in a bid to boost the economy ahead of what it said would be a temporary rise in inflation.
The unanimous decision by the seven-member board met the expectations of all analysts surveyed by Reuters this week.
The board said in a statement announcing the decision that though inflation looked set to rise in the near future, it would later fall back to around the bank’s ideal long-term target rate of 3%.
“Some supply shocks could raise inflation in the coming months, but this will resume its convergence to the target later,” board chief Juan Jose Echavarria said, reading from the statement.
Analysts’ inflation estimates for the year were up to 3.41%, from 3.3% in the previous survey. In June consumer prices will rise 0.19%, survey respondents said, sending 12-month inflation to 3.35%.
Despite lower-than-expected gross domestic product expansion in the first quarter, the economy will likely grow at a higher rate between April and June, the board said.
“The new figures suggest that the economy will be more dynamic in the second quarter,” the board said.
Colombia’s economy expanded 2.8% in the first quarter.
Analysts in the Reuters poll had predicted the bank would reduce its growth estimate for the year, currently at 3.5%, after the first quarter figures.
Echavarria said the bank would revise the estimate in two months, but did not elaborate.
Analysts’ growth expectations for 2019 were down to 3.15% in the survey, from 3.25% in an April poll. The government estimates growth will be 3.6%.
The policymakers have held the central bank’s benchmark interest rate at 4.25% for more than a year to encourage consumer spending without allowing inflation to creep higher. (Reporting by Julia Symmes Cobb, Nelson Bocanegra and Carlos Vargas; Editing by Richard Chang)