Colombia’s central bank is seen raising its benchmark interest rate by 25 basis points to 4.5 percent at its Friday meeting, all but one of 25 analysts polled by Reuters said on Monday.
The raise would be the sixth straight rate hike as the Andean nation’s monetary authority tries to fight inflation and keep Latin America’s fifth-largest economy from overheating.
“We were betting on a pause at the previous meetings which never came, and after first-quarter GDP figures we think they will raise 25 basis points,” said Carlos Corredor, analyst at Skandia investment fund.
Data last month showed Colombia’s economic growth soared 5.1 percent in the first quarter from a year earlier, beating expectations by the central bank and financial markets.
Twelve-month inflation reached 3.23 percent in June, within the bank’s 2011 target of between 2 and 4 percent.
A majority of experts sees the rate at the end of this year at 5 percent, while most expect the central bank to raise it to 5.5 percent by the end of 2012.
Most analysts polled do not expect the bank to announce on Friday further measures to curb the Colombian peso currency’s appreciation. The bank currently buys at least $20 million daily in a plan scheduled to run through the end of September.
The peso has strengthened 8.2 percent against the greenback so far this year but global risk aversion has helped tame further appreciation pressures recently.
“With the current international context, there might not be a need for further measures,” said Karen Alfonso, analyst at Bogota-based Correval, referring to the credit crisis in the euro zone and stalled debt talks in the United States.
Like other emerging markets, Colombia is battling appreciation pressures on its currency due to lower interest rates in developed markets and massive inflows of foreign direct investment.
