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BOGOTA, Oct 31 (Reuters) - Colombia’s central bank board held the benchmark interest rate unchanged yet again at its policy meeting on Thursday, part of a long-running effort to boost growth despite temporary increases in inflation and the depreciation of the peso currency.
The unanimous decision to keep borrowing costs at 4.25% was expected by the market and met the predictions of all analysts in a Reuters survey last week. The board is expected to hold the rate until sometime next year.
Policymakers have held the benchmark interest rate since April 2018 to bolster sluggish growth.
The bank raised its annual GDP growth estimate to 3.2% from 3% in September, but its figure is still below the government target of 3.6%.
Inflation reached 3.82% in the year to September, above the bank’s long-term 3% target rate.
“Temporary deviations of inflation from the target and uncertainty about the persistence of the depreciation of the peso,” were the top reasons why it held the rate, the board said in a statement.
The Colombian peso fell 8% against the dollar during the third quarter. But increases in consumer prices are temporary, the seven-member board said.
“Supply shocks that have affected inflation are expected to begin to subside and in early 2020 inflation will resume its convergence to the target, as reflected in market expectations,” the statement said.
The bank has ended a dollar-buying effort announced in September 2018, the board said in a separate statement, after accumulating $2.8 billion.
“For now we don’t see a scenario for accumulating reserves, what we bought in the past is enough and for now we don’t see (dollar) purchases in the short term,” board chief Juan Jose Echavarria told journalists. (Reporting by Nelson Bocanegra and Carlos Vargas Writing by Julia Symmes Cobb; Editing by Tom Brown)