(Adds comments from central bank, analyst)
SANTIAGO, Sept 15 Chile's central bank held the
benchmark interest rate at 3.5 percent on Thursday,
as expected, maintaining its neutral stance as inflation has
The bank has kept rates on hold since January and recently
said it does not foresee a need to hike the benchmark interest
rate over the coming two-year policy horizon.
Economic data in the top copper exporter has been weak since
2014 on the back of a fall in price of copper but inflation,
which was above the central bank's 2 to 4 percent tolerance
range for over two years, has recently returned to target.
In response, the bank removed from its post-meeting
statement a phrase it had repeated since mid-2014 indicating
that it was monitoring inflation "with special attention".
The bank has forecast that inflation is expected to end the
year at 3.5 percent and ease further to 3.1 percent in 2017.
It said that partial third-quarter data pointed to limited
growth in output and demand, and underscored that the labor
market continued to gradually deteriorate.
"With growth likely to remain stuck around 2 percent
year-on-year over the remainder of this year, policymakers will
want to keep monetary policy fairly supportive," said Adam
Collins, Latin America Economist with Capital Economics.
"As such, we agree with the central bank's current view that
interest rates are likely to remain unchanged at 3.50 percent
(Reporting by Anthony Esposito; Editing by Bill Rigby and James