(Adds analyst comments, paragraph 5)
SANTIAGO, Jan 14 (Reuters) - Chile's central bank held the benchmark interest rate at 3.5 percent on Thursday, as expected, and maintained its bias toward gradual tightening in the coming months.
"The future path of the monetary policy rate considers measured 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 said in its post-meeting statement.
Inflation in the 12 months to December was 4.4 percent, ending the year above the central bank's 2 percent to 4 percent target range.
To counteract above-target inflation, the bank hiked the interest rate by 25 basis points in October and December.
"We suspect that interest rates in Chile still have further to rise but the accompanying statement to today's monetary policy meeting makes it clear that the central bank isn't going to be panicked into aggressive policy tightening," said Neil Shearing, chief emerging markets economist at Capital Economics.
Shearing said he expects banks will likely hike the rate again by 25 basis points in March.
Monetary policymakers in Chile have had to juggle stubbornly high inflation, with a subdued economic recovery in the globe's top copper producer.
The bank said it will continue to monitor the evolution of inflation "with special attention" and highlighted that available fourth quarter data continue to show "limited growth in domestic output and demand." (Reporting and writing Gram Slattery; Editing by Chris Reese and Anthony Esposito; Editing by Diane Craft, Bernard Orr)