UPDATE 1-Chile's cenbank cuts rates to 3.0 pct, shelves easing bias

jueves 16 de octubre de 2014 18:02 GYT
 

(Adds central bank's comments, background)

By Anthony Esposito

SANTIAGO Oct 16 (Reuters) - Chile's central bank cut the benchmark interest rate by 25 basis points to 3.0 percent on Thursday, as widely expected, but removed its easing bias in a likely signal a year-long loosening cycle was over.

The bank cut the rate for the fourth straight month, despite above-target inflation. The economy of the top copper producer has slowed to levels not seen in over four years, as investment dwindles, especially in the mining sector, and once-hot consumer demand cools.

"Output, demand and employment indicators continue to reveal the low dynamism of the Chilean economy," the bank said in its post-meeting statement. Economic growth is expected to be 2 percent in 2014 and then pick up to about 3.6 percent next year.

In its effort to prop up the economy, the bank has now reduced rates by a total of 200 basis points since October 2013.

The bank did, however, alter its recent bias in Thursday's post-meeting statement, indicating, as many had predicted, that its easing cycle had drawn to an end for now.

It said: "Any future changes in the monetary policy rate will depend on the implications of domestic and external macroeconomic conditions on the inflationary outlook."   Continuación...