NEW YORK — Colombia’s Banco de la Republica has been a laggard when compared with most Latin American central banks in raising rates to contain a pesky inflation. That’s about to change September 30.

The bank meets on Thursday and Goldman Sachs expects its board of directors to vote for a 25bps rate increase taking the reference rate to 2%, the first rate move since the policymakers decided to cut the rate to a record low level a year ago amid the economic contraction induced by the COVID-19 pandemic.

A rate increase is warranted by the signals made by the board of directors on July 30 meeting and “the recent macro-financial and policy developments” in Colombia’s economy, analyst Alberto Ramos wrote in a report dated September 24. A robust growth, high inflation and the deterioration of inflation expectations are among the factors cited in the note to investors to justify a “policy rate liftoff.”

Since the last meeting, “the Covid backdrop improved further, real activity data was positive and strong (above consensus June and July real GDP prints, as well as strong retail sales and manufacturing production),” the analyst said.

BanRep, as Colombia’s central bank is known, may continue with two additional hikes this year to end the period with the policy rate at 2.50%. The tepid rate adjustment will be followed by a much aggressive monetary policy next year that may take the benchmark rate to 3.75% or 4% by the end of 2022.

“In our assessment, a gradual reduction in the degree of monetary accommodation is also warranted given recent hawkish regional and global monetary developments,” according to the report. In addition to a high risk-premia given the challenging fiscal picture, sovereign rating downgrades, and uncertain political and policy backdrop will also lead BanRep to be more aggressive in 2022.

However, Trading Economics sees BanRep staying on hold this week. In the long-term, projects the rate “to trend around 3.00 percent in 2022 and 3.50 percent in 2023,” according their econometric models.

In the last monetary meeting on July 30 BanRep’s board cited a manageable inflation rate of 3.63% in June as a factor to stay on hold. In the decision the board also raised the economic growth forecast to 7.5% for this year compared with a previous projection of 6.5%.