(Adds cenbank chief’s comments, background)
SANTIAGO, Oct 28 (Reuters) - Bringing inflation in Chile to the midpoint of the central bank’s 2 percent to 4 percent target range will require reducing monetary stimulus, or in other words, hiking the key interest rate, central bank president Rodrigo Vergara said on Wednesday.
“The monetary policy scenario has not changed and as such one should think that over the next 10 months, through September next year, we should have one or two more hikes in the monetary policy rate,” said Vergara.
The timing of the hikes will depend on the economic data and its impact on inflation and expectations for inflation, he said, adding that Chile’s economy has made an important “adjustment” vis-à-vis a sharply depreciated peso currency.
So far this year Chile’s peso has depreciated 12 percent versus the U.S. dollar, after declining just over 13 percent last year.
Vergara underscored that Chile’s economy remained healthy.
The central bank raised the benchmark interest rate by 25 basis points to 3.25 percent on Oct. 15 and said further hikes were likely as it tries to rein in stubbornly high inflation. (Reporting by Felipe Iturrieta; Writing by Anthony Esposito; Editing by Chizu Nomiyama and Jeffrey Benkoe)