By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s central bank board will meet on Tuesday for the final time this year, to weigh whether to begin cuts to the historically-high interest rate or hold off to await further information about the potential behavior of inflation.

Analysts have predicted the seven-member board will be split, as it has been at the two most recent meetings.

Nine of 20 analysts surveyed by Reuters last week said the bank would keep the benchmark rate at 13.25%, its highest point in 24 years.

Six analysts predicted a 25 basis points cut and five forecast a 50 basis points trim.

A reduction would be first cut to the rate since September 2020.

“The slowdown in economic activity will be the main point of disagreement among the central bank board. A rate cut in December is still possible,” Scotiabank said in a note, though it added inflation risks remain and the minimum wage hike for next year has not yet been agreed, which may motivate some policymakers not to hold borrowing costs.

The meeting comes a day after the statistics agency said gross domestic product contracted 0.41% year-on-year in October, the third consecutive monthly contraction.

Though inflation in November was 10.15% year-on-year, below market expectations, and is expected to end 2023 in single digits, it remains far from the bank’s long-term 3% target.

The El Nino weather phenomena, the minimum wage hike and increases in diesel prices that could spark trucker protests are inflation risks in the first quarter next year, said Wilson Tovar, head of analysis at Acciones y Valores, and require “prudence” on the part of the board.

Many analysts expect a cut in January even if the board decides against one on Tuesday.

According to the Reuters survey, the interest rate will close next year at 8% and at 5.5% in 2025.