By Nelson Bocanegra and Carlos Vargas
BOGOTA, Sept 16 (Reuters) - The spike in Colombia's inflation figures in August demands a reassessment of how tight the country's monetary policy should be, central bank board member Olga Lucia Acosta told Reuters, adding further action is needed to steer prices toward the figure's long-term target.
Annual inflation rate rose to 6.24% in August, its highest level in two years and exceeding analysts' forecasts. Markets expect the long-term 3% target will not be met in 2026 or 2027.
"July was a moment of hope, it had a slight moderation, we were waiting for the result of August and indeed inflation continued to rise," Acosta said in an interview on Tuesday afternoon.
The central bank increased its benchmark interest rate in January, March and June, and held it at 12% at its latest meeting in July. It will meet again on September 30.
"What the data is showing us is that inflation has risen, requiring us to recalibrate and examine how tight monetary policy needs to be," Acosta explained. "The data, therefore, is showing us that there is still action to be taken."
The 23% rise in the minimum wage this year by the now-departed leftist government has had a significant impact on inflation through price indexation, Acosta said data shows.
However, the economist described fiscal problems as the main driver of high inflation, as higher wages and government spending have pushed up domestic demand.
"It's important that the fiscal adjustment helps us to have inflation expectations that gradually approach the bank's target," she emphasized.
The recently inaugurated government of right-wing President Abelardo De La Espriella projected deficits of 7.2% of GDP for 2026 and 9.4% of GDP for 2027, and has pledged austerity measures.
Though she said Colombia's economy is resilient, Acosta warned about the growing trade deficit resulting from the appreciation of the Colombian peso against the dollar and slower growth in exports.
Though business leaders have asked the central bank to intervene to contain the peso, which has appreciated by 21% in the last 12 months, its highest level in almost eight years, Acosta said the institution can do nothing to rein in the currency.
(Report by Nelson Bocanegra and Carlos Vargas
Editing by Nick Zieminski)