April 12, 2016 / 9:47 PM / 2 years ago

UPDATE 1-Chile central bank holds interest rate steady, eases bias

(Adds comments from central bank and economist)

SANTIAGO, April 12 (Reuters) - Chile’s central bank held the benchmark interest rate steady at 3.5 percent on Tuesday, as expected, and toned down its bias towards future rate hikes.

The bank has been grappling with above-target inflation and soft economic growth in the top copper producer.

“The board estimates that to ensure the convergence of inflation to the target, monetary policy will need to continue with its normalization,” the bank said in its post-meeting statement, adding that the pace would depend on new data and its implications for inflation.

It removed a phrase about “considering measured adjustments” that it has included in recent months.

“The most important thing is that the bank modified its bias; it kept the rate hike bias but moderated it compared to prior statements,” said Antonio Moncado, economist with BCI.

Making future rate change dependent on data means the bank is moving toward a message of a “prolonged period of rate holds,” he said.

Annual inflation came in at 4.5 percent in March, above the central bank’s 2 to 4 percent target range.

Inflation is seen remaining above 4 percent for some months, the bank said. (Reporting by Santiago newsroom; Editing by Chris Reese and James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below