2014.04.1804:21:00UTC+00Chile Central Bank Holds Key Rate As Expected

Chile central bank maintained its key rate late Thursday as inflation accelerated after lowering the interest rates over the last few months.

The Board of the Central Bank of Chile decided to hold the key rate at 4 percent. The bank has lowered the rate by 100 basis points since last October.

The board, however, said it will consider the possibility of making additional cuts to the policy rate in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook.

At the same time, the Board reiterated its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3 percent over the policy horizon.

Fueled by the weakness in peso, inflation rose to 3.5 percent in March from 3.2 percent in February. The bank expects inflation to rise temporarily to 3.5-4 percent range, before moving close to 3 percent by the end of this year.