UPDATE 1-Colombia cenbank says keeps key rate unchanged

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BOGOTA, June 20 (Reuters) - Colombia's central bank said on Friday it kept its key interest rate unchanged at 9.75 percent and decided to increase its international reserves to guard against a possible downturn in global market conditions.

The bank has raised its overnight rate by 3.75 percentage points since April 2006 in an attempt to tame inflation. Consumer prices have continued to rise nonetheless, pressured by the increasing cost of food.

Inflation rose a faster-than-expected 0.93 percent in May, putting Colombia's 2008 consumer price rise target ceiling of 4.5 percent all but out of reach.

Many economists had called for a tightening of monetary policy on Friday. But Colombia's business community is lobbying hard for stable or lower rates to combat the rise of the peso, which is up more than 16 percent against the dollar so far in 2008. (Reporting by Monica Garcia; Editing by Carol Bishopric)