off-the-wire

UPDATE 1-Chile central bank holds key interest rate unchanged at 11.25%

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds comments from central bank, background) SANTIAGO, April 4 (Reuters) - Chile's central bank kept its benchmark interest rate unchanged at 11.25% on Tuesday, in a unanimous vote by its board members, as it warned that the economy is adjusting more slowly than expected and inflation is taking longer to come down. "The board considers that it will be necessary to keep the monetary policy rate at 11.25% until macroeconomic conditions indicate that the process of inflation convergence to the 3% target has been consolidated," the bank said in a post-meeting statement. Consumer prices in the copper-exporting


nation unexpectedly fell in February , bringing 12-month headline inflation to 11.9%, down from 12.3% in January.


Still, the central bank underscored that inflation remains high and while total inflation has declined, core inflation, considered a better gauge of the price trajectory since it excludes items of high volatility, has been "fairly constant for several months."


The central bank added that core inflation had also "accumulated a significant upward surprise in recent months."


Recent data shows that for the end of 2022 and the start of 2023 the economy's adjustment process has been slower than expected, said the bank.


Chile's mining-driven economy grew a


smaller-than-expected 0.1% in the last quarter of 2022, but broke a streak of three quarter-on-quarter declines to record 2.4% growth for the full year, the central bank data showed last month.
(Reporting by Fabian Cambero and Anthony Esposito; Editing by Isabel Woodford)

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