August 17, 2017 / 9:16 PM / a year ago

UPDATE 1-Chile central bank holds interest rate at 2.5 percent

(Adds details from statement, context)

SANTIAGO, Aug 17 (Reuters) - Chile’s central bank held the benchmark interest rate at 2.5 percent on Thursday, and maintained a neutral bias.

The bank brought its last easing cycle to an end in May and has held the interest rate unchanged since then.

In its statement, the bank noted inflation was running at around 1.7 percent annually, below its 2 to 4 percent target range.

That has led many in the market to anticipate a fresh rate cut before the end of the year, although most had forecast a hold this month.

One board member voted for a cut last month.

But the bank did not alter its bias, potentially surprising the market that had been expecting hints of more easing in the short term.

“The board reiterates its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3 percent over the policy horizon,” the bank said in its statement. (Reporting by Santiago bureau; Editing by James Dalgleish)

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