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SANTIAGO, July 4 (Reuters) - The Chilean central bank considered holding its key interest rate steady at 3.5 percent as the only plausible option at its June 16 monetary policy meeting, though a hike could be in the works in coming months, minutes of the meeting showed on Monday.
The decision to keep the rate on hold in June was unanimous among the bank’s five governing board members, who agreed that if the economy progressed as expected further monetary policy “normalization” would be necessary, minutes also showed.
Keeping the rate steady in June “by no means implied ruling out the option to raise the monetary policy rate in the foreseeable future, because in the most likely scenario there was still the need for additional increases in the monetary policy rate to ensure the convergence of inflation to 3 percent in the policy horizon,” said the bank.
Ultimately, successive downward revisions to the economic growth outlook, the fact that the real exchange rate was in line with fundamentals, inflation had decreased as estimated and expected inflation had remained well anchored at 3 percent prompted the bank to hold in June, the minutes said. (Reporting by Anthony Esposito; Editing by James Dalgleish)