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SANTIAGO, May 4 (Reuters) - Chile’s central bank remains neutral on monetary policy, according to the minutes of its April 16 policy meeting, when the bank held the benchmark interest rate steady at 3.0 percent for the sixth month in a row.
The central bank lowered the rate by 200 basis points between October 2013 and October 2014 to stimulate a flagging economy but has since paused to allow inflation to cool.
Annual inflation has stubbornly remained above the central bank’s 2 percent to 4 percent tolerance range for the past year, but consumer prices rose less than expected in March.
“Assuming that these surprises were persistent, and given the impact of the recent appreciation of (Chile‘s) peso on the fuels scenario, inflation should be within the tolerance range in the coming months and at year’s end would be closer to 3 percent than had been foreseen” in the bank’s March Monetary Policy Report, minutes said on Monday.
“These developments were unmistakably positive,” the bank said.
Bank President Rodrigo Vergara said on April 1 its operating assumption was that it would raise the benchmark interest rate toward the end of 2015 or at the start of next year. (Reporting by Anthony Esposito; Editing by Jeffrey Benkoe)