(Adds options presented at meeting, additional quote)
SANTIAGO, Sept 1 (Reuters) - Chile’s central bank did not unanimously vote in August to keep the benchmark interest rate on hold, with one board member supporting a 25-basis-point cut, minutes from its meeting showed on Friday.
At the meeting, the bank held the rate at 2.5 percent and maintained its neutral bias even as some analysts are expecting near-term easing due to slowing inflation.
The minutes showed the board members generally concurred that inflation expectations and growth figures were in line with long-term forecasts despite some surprises to the downside in recent months. Inflation in the 12 months to July came in at 1.7 percent, below the bank’s 2 percent to 4 percent target range, while growth in the world’s top copper exporter remained below 2 percent.
“Various governors agreed that, going beyond short-term differences in the statistics, the evolution of the macroeconomic scenario was coherent with maintaining the interest rate at this meeting,” the minutes said.
The bank’s Studies Division presented two options to the five governors at the August meeting. One option was to maintain the rate and neutral bias, while the other was to lower the rate to 2.25 percent while adopting an expansionary bias.
“With respect to the expansionary bias associated with the second option,” the bank said, “it is based on that idea that if you’re looking to act preventatively in the face of a slower economic recovery, it would be difficult to think that one isolated 25 basis point movement would be sufficient.”
As the market expects the interest rate to be about 3 percent in the first quarter of 2019, the bank added, the second strategy would probably require quick rate hikes at some point, which could be difficult.
Two governors said the bank’s quarterly IPoM monetary policy report set for release on Sept. 6 would be a more appropriate way to communicate any tweaks to underlying assumptions.
Reporting by Gram Slattery; Editing by Lisa Von Ahn