By Kejal Vyas 

BOGOTÁ -- Colombia's central bank lowered its benchmark interest rate by a quarter percentage point to 7% Friday, as policy makers look to boost economic growth amid easing inflation.

The bank was widely expected to cut its rate for the second straight month after retail sales, manufacturing activity and consumer confidence fell in January.

"If that trend is pronounced, the outlook for 2017 growth could be reduced," from the 2.5% Colombia's economy is expected to grow this year, the bank said in a statement.

Annual inflation, meanwhile, has fallen for seven consecutive months to 5.2% in February, down from a 16-year high of nearly 9% in mid 2016.

Fast sliding inflation has the central bank's board split over the pace of rate cuts, according to Finance Minister Mauricio Cardenas, one of the board's seven members. Mr. Cardenas said in a news conference he voted for a more aggressive rate reduction of half of a percentage point.

"The economy needs this stimulus for consumption and investment," he said.

Four of the bank's board members voted for the 0.25% cut while one voted to keep the rate unchanged. Only six of its members voted in the meeting because Jose Antonio Ocampo, who was appointed by President Juan Manuel Santos last month, hasn't yet taken up the new post.

Write to Kejal Vyas at kejal.vyas@wsj.com

(END) Dow Jones Newswires

March 24, 2017 16:50 ET (20:50 GMT)

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