September 23, 2019 / 12:08 PM / 25 days ago

Chile cenbank considered dropping key interest rate by 75 points - minutes

SANTIAGO, Sept 23 (Reuters) - Chilean central bank policymakers considered cutting the benchmark interest rate by up to three quarters of a percentage point before unanimously settling on a less drastic 50 point cut to 2%, according to meeting minutes released on Monday.

The policymakers ruled that a 75 point drop was “complex” and might give the impression the Chilean economy was more “vulnerable” that it was. A 25 point cut, which was also considered, could however be interpreted as “excessively prudent or passive”, the minutes said.

The group cited the ongoing United States-China trade war, which has hit exports of Chile’s core product copper, as a reason for economic slowdown. They also raised concern about domestic activity which had grown less than expected.

The central bank earlier this month revised down its 2019 year-end inflation forecast to 2.7%, from a previous prediction of 2.8%.

Annual inflation rose 2.3 percent in the 12 month period to August, remaining near the bottom of the central bank’s target range. (Reporting by Aislinn Laing; Editing by Chizu Nomiyama)

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