April 13, 2018 / 5:40 PM / a year ago

Colombia inflation will decide depth of rate cut -finance minister

CARTAGENA, April 13 (Reuters) - Colombian Finance Minister Mauricio Cardenas said on Friday he would decide whether to back an interest rate cut of 25 or 50 basis points at the central bank’s April meeting based on how inflation behaves over the next two weeks.

Cardenas represents the government on the seven-member board. The bank’s next meeting is on April 27.

In March the board voted to hold borrowing costs at 4.5 percent amid concern about how quickly inflation was moving toward the target and despite sluggish growth. But Cardenas said last week that March inflation data opened the door to a reduction this month.

“The proposal will be to lower interest rates,” Cardenas told reporters at a banking conference in the Caribbean city of Cartagena. “There’s a bit over two weeks to go; we’ll analyze the projections more to define if the proposal of the government will be to lower 25 or 50 basis points.”

Central bank chief Juan Jose Echavarria said on Thursday the behavior of consumer prices is leaving space to keep boosting the economy with rate cuts.

A majority of analysts in a Reuters survey last month estimated that the board would cut borrowing costs in April by a quarter point, to 4.25 percent.

The central bank cut a total of 325 basis points from the rate between December 2016 and January of this year. (Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb; Editing by Dan Grebler)

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