UPDATE 1-Chile central bank chief sees 'certain probability' of further rate cuts

viernes 20 de junio de 2014 10:33 GYT
 

(Adds further comments from bank chief)

SANTIAGO, June 20 (Reuters) - Chile's central bank chief, Rodrigo Vergara, said on Friday that the bank's expansive monetary policy would continue and further rate cuts were probable.

"Our monetary policy continues being expansive and in that sense we see a certain probability of further loosening in the coming months," Vergara said at a business forum.

The bank cut the benchmark rate to 4.0 percent from 5.0 percent between October and March to stimulate a flagging economy, but unexpectedly high inflation has stayed its hand since.

"I wouldn't say that this is a dilemma, strictly speaking," said Vergara.

"But inflation is another element to consider in decisions on monetary policy."

Vergara repeated that the bank expected the economy to improve over the year.

"(The board) also reaffirms the need for all participants in the financial system to evaluate appropriately their decisions on getting into debt and giving credit," he said in his presentation. (Reporting by Anthony Esposito, Writing by Rosalba O'Brien; Editing by Chizu Nomiyama and Jonathan Oatis)