Colombia’s central bank will probably keep its benchmark interest rate unchanged as policy makers judge that eight cuts this year to a record low are enough to fuel an economic rebound and end a bout of deflation.
The seven-member board, led by chief Jose Dario Uribe, will hold the interbank rate at 3.5% when they meet today, according to 26 of 27 economists surveyed by Bloomberg. One analyst expects a second consecutive half-point reduction.
The central bank last month lowered borrowing costs in a bid to accelerate growth in Latin America’s fifth-biggest economy. Some policy makers at the November 23 meeting, where the board unexpectedly voted for a half-point cut, said that the reduction might stoke inflation next year, according to minutes of the meeting.
“The November rate cut was the last push for the economy,” said Jorge Cortes, an analyst at Corp. Financiera Colombiana SA in Bogota. “They’ll want to avoid having to raise rates again too quickly, which could impact already low credit demand in a period of recovery.”