Colombia central bank cuts benchmark rate to 10.75%, hikes growth outlook

By Nelson Bocanegra

BOGOTA (Reuters) -Colombia's central bank cut its benchmark interest rate by 50 basis points to 10.75% on Wednesday, its sixth cut since December, as the bank's technical team raised its growth outlook for the year.

The decision was backed by five of the central bank's seven board members. Two members pushed for a cut of 75 basis points, the central bank said in a statement.

The decision was in line with market expectations. All 22 analysts quizzed in a Reuters poll last week said they expected the board to vote to cut the rate to 10.75%, down from 11.25%, taking the benchmark interest rate to its lowest level since 2022.

Earlier, the U.S. Federal Reserve voted unanimously to keep its benchmark overnight interest rate in the 5.25%-5.50% range, citing "elevated" inflation, but it signaled that a rate cut in September was possible.

The technical team of Colombia's central bank on Wednesday revised its growth outlook for the year to 1.8%, up from 1.4% previously, the bank said in a statement.

Colombia's 12-month inflation through the end of June was 7.18%, marginally above the 7.16% rate at the end of May, putting the brakes on a downward trajectory and keeping inflation well above the bank's 3% target.

Wednesday's rate decision takes accumulated cuts to a total of 250 basis points since December.

The meeting comes just weeks before Colombia publishes its second-quarter growth figure, which will be key in determining what measures are needed to push the economy further, analysts say.

(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by William Maclean and Leslie Adler)