Wall Street Journal – Colombia’s central-bank officials will meet on May 31 to discuss possible action on interest rates. While some key economic data including industrial production continue to disappoint, many analysts believe the bank will leave its key rate steady for a second straight month at 3.25%, which is the lowest benchmark interest rate this South American country has seen since early 2011.

Speaking at his office in downtown Bogota on Tuesday afternoon, Mr. Meisel suggested further rate reductions might not be necessary because of some “good signs” regarding Colombia’s economy, which will probably grow around 4.3% this year after expanding 4% in 2012 and 6.6% in 2011.

He pointed to consumer-expectations data that he said show consumers are regaining confidence. An economic stimulus plan announced last month by the government is also expected to help spur growth.

“Things seem to be picking up,” Mr. Meisel said. “Still, the data are not easy to read; one day you see positive information, but the next day other data are negative.”

The central bank lowered borrowing costs for five straight months starting in November, including a hefty 0.5 percentage-point rate reduction in March. Most private banks have passed these lower rates on to consumers, but the cheaper borrowing costs have so far done little to help the overall economy amid a drop in consumer spending and lower global prices for oil and coal, the country’s main exports.

Mr. Meisel, one of two new members appointed in March to Colombia’s seven-person central-bank board, said no decision has yet been made in terms of what the bank might do with interest rates, but any possible rate reduction would carry risks.

“What might happen ahead if we are overstimulating the economy? This is the main concern,” said Mr. Meisel, 59 years old, an economist with degrees from Yale and the University of Illinois, as well as Colombia’s Universidad de Los Andes.

His concerns about cutting rates too much come after neighboring Brazil’s central bank brought interest rates to historic lows, only to reverse course and begin raising interest rates last month as inflation took off. Critics say Brazil’s central bank had become too focused on spurring economic growth and didn’t pay enough attention to inflation, which is now at the high end of the bank’s target range of 2.5% to 6.5%.

Unlike Brazil, Colombia isn’t facing inflationary pressures. Annual consumer inflation is running at the low end of the central bank’s 2% to 4% target. Mr. Meisel said inflation probably won’t return to the bank’s midrange 3% target until the end of 2014.Some analysts argue that Colombia’s low inflation gives it the room to reduce interest rates at least one more time this year to spur consumer spending and help drive the economy higher.

While expressing confidence that Colombia’s oil-driven economy is starting to regain its footing, Mr. Meisel said the global economy continues to be a risk for Colombia.

“What most concerns me is what’s happening in the international economy, things can change dramatically from one day to the next,” said Mr. Meisel, who headed the bank’s office in his hometown of Cartagena before moving to Bogota this year to become a board member. “And whatever we do has to take into account the international economy.”

The interest-rate decision, Mr. Meisel said, will take into consideration “how exports are evolving, and employment statistics, and in general the perspectives of the economy in the near future.”

At the central bank’s meeting this month, the board will also consider whether to extend a policy of buying at least $30 million daily in the foreign exchange market in an effort to prevent the peso from becoming too strong against the dollar. The peso rose 10% versus the dollar last year, hurting Colombian exporters’ profits. But so far in 2013, the peso is 4% weaker at COP1,839 for a dollar.

The daily intervention policy expires May 31, the same day as the meeting. Mr. Meisel wouldn’t comment on whether the intervention would be renewed, but he said the bank is committed to preventing strong gains in the peso against the dollar. He also said the government’s efforts at forcing the peso weaker, which include trying to persuade private pension funds to buy more dollars, isn’t seen as a “substitute” for the bank’s daily dollar purchases, which he said have a more direct effect on the exchange rate than the government’s efforts with pension funds.