BOGOTA, June 28 (Reuters) - The board of Colombia's central bank will meet on Friday to vote on making a new cut to the benchmark interest rate, with analysts expecting a 50-basis point reduction, as policy makers support economic recovery while holding the reins on inflation.
A recent Reuters poll saw 25 analysts unanimously forecast that the bank will lower the benchmark interest rate to 11.25%, its lowest level since October 2022.
However, such a cut would still leave the benchmark rate higher than inflation, which ended the 12-months through May 31 at 7.16%, above the bank's long-term target of 3%.
"The messages of caution and prudence and the experiences of other countries, such as the case of Chile, shed light on the fact that it is better to take it step by step, controlling inflation, anchoring downward expectations, addressing possible outbreaks or pressures in some areas in a controlled manner," said Laura Clavijo, director of economic research at Bancolombia.
"We don't see more room for faster rate cuts, we estimate that between now and the end of the year the central bank will continue to make cuts of 50 basis points, as it has been doing," she added.
Although analysts were united in their forecasts, the board's vote is not expected to be unanimous, with a small faction of the seven members voting for a bigger cut.
Last Wednesday, Finance Minister Ricardo Bonilla - who represents the government on the bank's board - told a forum that he will push for a cut of 100 basis points.
If the analysts' estimate is met, total cuts by the board to the central bank's benchmark rate would reach 200 basis points.
(Reporting by Nelson Bocanegra Writing by Oliver Griffin; Editing by Aurora Ellis)
