(Adds comments from central bank and analyst)
SANTIAGO, Nov 12 (Reuters) - Chile’s central bank held its key interest rate steady at 3.25 percent on Thursday, though it suggested rate increases were likely in coming months to tamp down stubbornly high inflation.
Bringing inflation to the midpoint of the central bank’s 2 percent to 4 percent target range will require reducing monetary stimulus, bank president Rodrigo Vergara said in recent weeks, underscoring that one or two more rate hikes were likely through September 2016 following an October increase.
“The future path of the monetary policy rate considers additional adjustments aimed to ensure the convergence of inflation to the target, at a pace that will depend on incoming information and its implications on inflation,” the bank’s post-meeting statement said.
The bank said it would continue to monitor the evolution of and expectations for inflation with “special attention.”
Monetary policymakers have had to juggle above-target inflation, with a subdued economic recovery in the globe’s top copper producer. Twelve-month inflation has remained either at the top end or above the bank’s 2-4 percent target range for over 1-1/2 years.
“We expect the monetary policy rate to remain unchanged throughout the rest of the year” and for the next rate hike to come after the U.S. Federal Reserve’s decision, said Banco Santander’s research division in a note to clients. (Reporting by Anthony Esposito and Gram Slattery; Editing by Chris Reese and Andrew Hay)