January 29, 2020 / 9:27 PM / 18 days ago

UPDATE 1-Chile central bank holds benchmark rate steady at 1.75%

(Updates with quote from bank statement, additional context)

SANTIAGO, Jan 29 (Reuters) - Chile’s central bank said on Wednesday it would hold its benchmark interest rate unchanged at 1.75% as it seeks to steady the country’s wavering economy following months of intense and often violent protests.

The bank said the decision was rooted in uncertainty around inflation, which has crept upward to 3% as the peso has weakened and the economy faltered.

“The bank reaffirms its commitment to conduct monetary policy flexibly, in order to hold projected inflation at 3% for the two year horizon,” the bank said in statement.

The bank’s decision was unanimous, and in line with market expectations.

Demonstrations have rocked Chile since October, leaving at least 27 dead and billions of dollars’ damage to public infrastructure and private business in what was once the region’s most stable economy.

The violence saw the military take to the streets for the first time since the country’s return to democracy in 1990.

Protests have recently subsided, though sporadic violence persists. But the economic toll of the unrest is expected to linger through at least 2020.

The central bank in December slashed its 2020 growth forecast to a range of 0.5% to 1.5% from 2.75% to 3.75% previously.

Chile is the world’s top copper producer. (Reporting by Dave Sherwood; Editing by Sandra Maler and Alistair Bell)

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