* Bank holds rate for second straight month
* Inflation moving toward target range
By Helen Murphy and Eduardo Garcia
BOGOTA, April 30 (Reuters) - Colombia's central bank held borrowing costs steady for a second straight month on Monday, a sign policy makers feel a yearlong cycle of hikes in the benchmark interest rate has helped ease inflation even as consumer credit remains strong.
After almost six hours of discussion, the seven-member board decided unanimously to keep the lending rate at 5.25 percent, meeting the forecasts of all 30 analysts surveyed in a Reuters poll.
The bank also expressed concern about the strengthening peso, which has gained 9.3 percent so far this year, and voted to extend for another three months its dollar purchase program. The bank will buy at least $20 million a day on the spot market until Nov. 2.
"One clear externality of foreign exchange appreciation into monetary policy is that further policy rate hikes are now very unlikely," said Nomura Securities analyst Benito Berber.
Improved security and clear investment rules have attracted a flood of foreign money into Colombia in recent years, boosting the value of the peso and accelerating economic growth.
The economy grew 5.9 percent in 2011 from the year earlier as factory owners boost output and hired workers.
It also inspired a growing middle class to take on debt to buy big-ticket items and real estate, which in turn has put upward pressure on prices. Annual inflation in 2011 reached 3.73 percent.
Full-year 2012 inflation is expected to slow to 3.3 percent from 3.4 percent, according to the most recent Reuters survey and well within the government's 2 to 4 percent target range for the year.
Policymakers have raised concerns in recent months about the risks of Colombian households taking on too much bank debt to buy new cars, real estate and home appliances. Some board members have said that banks are lending too easily to people who may have trouble paying back their loans.
"Credit growth remains high, especially consumer, which indicates that households have increased significantly their debt levels," Central Bank chief Jose Dario Uribe told reporters after announcing the rate decision.
Economists in a Reuters poll last week forecast the bank would boost the rate to as high as 5.75 percent this year.
While some board members last month said "additional adjustments" in rates might be necessary to cool the pace of consumer lending, the central bank on Monday noted inflation in one of Latin America's fastest-growing economies will probably ease this year.
"Policymakers seem comfortable with the recent actual and expected inflation dynamics and sees welcome signs of domestic demand moderation," said Goldman Sachs economist Alberto Ramos.
The board "should remain in a wait-and-see mode; data will tell whether further tightening is needed," he said.
Uribe said that "available information" points to a slowing so far this year of household consumption and investment, in line with 2012 growth expectations of between 4 percent and 6 percent.
The hold on interest rates moved Colombia more in line with other emerging markets, like Chile, where central banks have cut or held lending rates to stem prices and guard their economies against fallout from the global economic slowdown.
Risk that a strong recession in Europe could impact Colombia remains, though the "probability has diminished," Uribe said.