November 14, 2017 / 9:40 PM / a year ago

Chile central bank says holds benchmark interest rate steady at 2.5 percent

SANTIAGO (Reuters) - Chile’s central bank kept its benchmark interest rate CLINTR=ECI unchanged at 2.5 percent at its monthly policy meeting on Tuesday, in line with market expectations, but left open the possibility for increased stimulus should inflation continue to lag behind its target rate.

Inflation in the past 12 months in Chile was 1.9 percent, slightly below the central bank’s target of 2 percent to 4 percent, and has risen more slowly than anticipated in recent months.

In its statement, the bank’s board said inflation would remain low in the near term, potentially slowing convergence toward its target.

“The bank board will pay special attention to this risk - already identified in the Report - as it could require adjusting the policy rate. At the same time, the Board reiterates its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3 percent over the two-year horizon,” the statement read.

Reporting by Dave SherwoodEditing by Jonathan Oatis

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