UPDATE 2-Colombia cenbank eyes inflation in rate decision

* Minutes show Colombia central bank watching inflation

* Inflation concerns may push earlier rate hike

(Adds details on central bank decision)

By Nelson Bocanegra

BOGOTA, Dec 4 (Reuters) - Several Colombian central bank policy makers fear a recent interest rate cut puts next year's inflation target at risk and could prompt a rate increase sooner than generally expected, according to minutes from the bank's last policy meeting released on Friday.

The statements from the minority of bank board members illustrate the bank may start to lean more toward raising its interest rate earlier than had been expected as inflation again begins to weigh on their policy decision next year.

"Other directors signaled a new cut in rates would make the reaching the 2010 inflation target difficult and as a result the board would have to start hiking interest rates at a moment when the economy had not fully recovered," according to the minutes of the Nov. 23 meeting.

The bank at its November 23 meeting voted by a majority to cut its benchmark rate by a surprising 50 basis points to a historic low of 3.5 percent, citing a fall in trade with Venezuela and recent sluggish economic activity.

A recent Reuters poll of analysts showed they had reduced their inflation outlook for 2010 to 3.8 percent from the 4.10 percent that those surveyed had expected in the previous poll conducted at the start of November.

"If the economy next year starts to pressure inflation again, they could start to raise rates sooner than later in 2010, Ricardo Perez, an analyst with local traders Alianza Valores. "The message one gets is that they are not going to lower rates any more."

The bank has cut its overnight rate by a total of 6.5 percentage points since the monetary policy loosening cycle began in December last year.

The Colombian government expects the economy to show recovery in the fourth quarter and for the country to come out of recession by the end of the year. But recent data has been weak though exports fell less than expected in October.

Venezuela is becoming an increasingly key issue in Colombian economic decisions after exports to the Andean neighbor collapsed over a diplomatic dispute between the two governments. Colombian exports to Venezuela plunged 70 percent in October alone. (Writing by Patrick Markey in Bogota; Editing by Theodore d'Afflisio) ((pat.markey@reuters.com, +57-1-634-4090, Reuters messaging: pat.markey.reuters.net@reuters.com))