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SANTIAGO, April 13 (Reuters) - Chile’s central bank cut its benchmark interest rate by 25 basis points, to 2.75 percent, at its monthly meeting on Thursday, and moderated its expansionary bias.
In a poll of analysts published by the bank on Tuesday, a majority expected the bank to hold the rate steady this month, but forecast the bank would cut it by 25 basis points in May. A sizeable minority, however, expected an April rate cut.
In a note following the decision, the bank said it would consider additional easing. That represents a slight modification of the bias from the previous decision in March, when the bank said current market conditions could make such easing necessary.
“In order to ensure the convergence of inflation to the (3 percent) target, the Board will evaluate the need for some additional increase in monetary impulse,” the bank said. “Bringing that about will depend on the medium-term inflation outlook.”
Nathan Pincheira, an analyst at Banchile, said there is room for additional easing, even as the bank’s bias is approaching neutral.
“I think the bias has been moderating in the last three decisions. Now, it’s almost neutral, but the next movement will of course be expansive,” Pincheira said. “There’s space for another cut based on what’s happening with prices.”
The central bank has now cut the interest rate a total of 75 basis points this year. Cooling inflation has given policymakers in Chile, the world’s top copper exporter, room to address the nation’s sluggish economy.
Reporting by Gram Slattery and Felipe Iturrieta; Editing by Leslie Adler