By Nelson Bocanegra
BOGOTA, July 28 (Reuters) - Colombia's central bank is expected to raise its benchmark interest rate on Friday due to persistent inflationary pressures, although it may be nearing the end of its hiking cycle, a Reuters poll showed on Tuesday.
In the survey, 16 of 25 analysts estimated a 50-basis-point hike to 12.50% at the bank's meeting on Friday. Three estimated a 75-basis-point increase to 12.75%, one forecast a 25-basis-point rise to 12.25%, and the remaining five expected the rate to hold steady at 12%.
The hike would mark the fourth increase to the benchmark borrowing cost following moves in January, March and June that totaled 275 basis points.
"The decision will be driven by the need to anchor inflation expectations and address the multiple factors behind rising inflation - including strong aggregate demand, external tensions, and climate-related risks that could impact energy and food prices," said Alejandro Lobo, head of economic research at the financial industry association Asobancaria.
"We expect the July move to be the last in the rate-hiking cycle. However, further moves cannot be ruled out should key indicators monitored by the central bank show significant deterioration," he added.
Colombia's 12-month inflation reached 6.14% through the end of June, the highest since July 2024 and above the central bank's 3% target. Analysts project the country will miss that goal for the sixth consecutive year in 2026.
Interest rate expectations for the end of the year rose to 12.50% from 12.25% in last month's survey. The forecast for the end of 2027 climbed to 11.25% from 10.50%.
(Reporting by Nelson Bocanegra; Editing by Cynthia Osterman)