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POLL-Colombia central bank to hold rate after seven months of cuts

Credit: REUTERS/LUISA GONZALEZ

Colombia's central bank will hold the benchmark interest rate steady at its October meeting, ending seven consecutive months of cuts which took borrowing costs to a historic low, analysts said in a Reuters poll on Thursday.

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BOGOTA, Oct 22 (Reuters) - Colombia's central bank will hold the benchmark interest rate steady at its October meeting, ending seven consecutive months of cuts which took borrowing costs to a historic low, analysts said in a Reuters poll on Thursday.

All 13 analysts agreed the seven-member board will hold the interest rate at 1.75% at its Oct. 30 meeting, in order to focus its attention on potential future inflation control after months of efforts to buoy up the economy.

Consumer prices were up 0.32% in September, above market expectations, as the economy began to recover after more than five months of a national lockdown meant to stem coronavirus infections.

"The most recent figures for inflation suggest there will not be additional rate cuts and it's foreseeable the current level will remain until the second half of 2021," investment holding Corficolombiana said in a note.

"In this scenario we'll have a historically-low short-term rate level in a context of ample liquidity in international markets," it said.

Seven analysts said the bank would leave the rate stable until the third quarter of next year, when it will begin to raise rates to avoid inflation going over the long-term 3% target once the economy has recovered.

The other six analysts predict the bank will hold the rate until the end of 2021.

The board trimmed 250 basis points between March and September to alleviate borrowing costs for business and individuals, as companies struggled and unemployment soared during quarantine.

(Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb Editing by Jonathan Oatis)

((julia.cobb@thomsonreuters.com; +57-316-389-7187;))

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