By Nelson Bocanegra
BOGOTA (Reuters) - Colombia's central bank board will raise the benchmark interest rate at its meeting next week, which is likely its penultimate increase in a cycle meant to counteract inflation, analysts said in a poll on Friday.
Twelve of 14 analysts surveyed said the seven-member board will increase borrowing costs by 100 basis points to 11%, while one analyst predicted a 75 basis point raise and another projected a 50 basis points uptick.
If the majority prediction is met, it would be the highest rate since July 2001.
"Observed inflation and the expectations continue to rise, economic activity is showing robust rates of expansion and during the year so far the labor market has closed its gap compared to pre-pandemic levels," said a report from investment holding Corficolombiana.
The firm expects the board to maintain considerable but gradual increases to send a message that they are committed to the medium-term inflation target.
Inflation hit 11.44% in September, nearly four times the bank's long-term 3% target. Analysts have said inflation will not fall to the target until beyond 2023.
The bank has increased the rate by 825 basis points since the start of this cycle in September 2021.
The bank will likely make its last increase, of 50 basis points, in December, those polled said.
Finance Minister Jose Antonio Ocampo, who represents the government on the board, has said high inflation is a supply-side problem that will not be fixed just by hiking interest rates, telling a forum on Thursday raising rates does "very little or nothing".
But Ocampo acknowledged it would be difficult not to raise costs in tandem with other central banks.
"It's very difficult not to follow international decisions," he said.