February 7, 2018 / 4:11 PM / 2 years ago

Colombia central bank to cut key rate if 12-month CPI is 3 pct in March

BOGOTA, Feb 7 (Reuters) - Colombia’s central bank could continue to lower its benchmark interest rate if it sees inflation of 3 percent in March, bank chief Juan Jose Echavarria said on Wednesday.

His comments come a day after he said he saw no more room to lower borrowing costs for now.

The seven-member board unexpectedly lowered the benchmark lending rate in January by 25 basis points to 4.5 percent, calling it the last cut in its current cycle, in a bid to boost a still-sluggish economy even as inflation remains above target.

“We’re not tied, if next month we see very good news in inflation we will continue to lower (rates),” Echavarria said during a presentation at an economic conference in Bogota.

“I don’t think it will happen, but if inflation is 3 percent in March, clearly we’ll lower rates,” he said.

Analysts have criticized what they consider confusing messages from Echavarria.

He also said that the bank expects inflation to be close to 3 percent toward the end of the year.

Twelve-month inflation in January was 3.68 percent, just within the bank’s long-term 2 to 4 percent target range. (Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Helen Murphy; Editing by Bernadette Baum)

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