(Adds details from central bank statement, context)
SANTIAGO, Feb 11 (Reuters) - Chile’s central bank held the benchmark interest rate steady at 3.50 percent on Thursday, as expected, as it weighed the need to cool above-target inflation against weak economic data.
The bank hiked the interest rate in December and held it last month, but has indicated that further hikes are likely, keeping the words of its bias identical to that of January’s post-meeting statement.
“The future path of the monetary policy rate considers measured adjustments aimed to ensure the convergence of inflation to target,” it said.
Inflation has repeatedly come in higher than market expectations over the last two years, with the annual rate currently running at 4.8 percent, some way above the bank’s 2 to 4 percent target range.
The main driver of surging inflation has been a weakening peso, affected by slowing Chinese growth and a fall in the price of copper, Chile’s main export.
The bank said it will continue to monitor inflation with “special attention.”
In opinion polls, analysts and traders had predicted the bank would keep the rate on hold in February but raise it 25 basis points in coming months.
Reporting by Rosalba O'Brien; Editing by Marguerita Choy and Grant McCool