(Adds comments from statement, context)
SANTIAGO May 18 Chile's central bank cut the
benchmark interest rate to 2.50 percent on Thursday, a more
rapid rate of loosening than the market had expected, and
altered its bias to indicate its easing cycle was over.
The move means the bank has cut the interest rate
100 basis points in total so far this year, as it
looks to address sluggish growth in the top copper exporter.
Recent central bank polls had indicated that a majority in
the market expected the bank to pause in its easing this month
and cut the rate in June, although a sizeable minority had
flagged that a reduction in May was possible.
In the end the bank went with the earlier stimulus date,
pointing to "important risks persisting" despite signs of
improving external economic conditions.
But it changed its bias, previously geared towards
loosening, to its neutral stance, saying that it would "conduct
monetary policy with flexibility".
The bank would likely leave the rate on hold now until at
least the first quarter of 2018, said Luis Felipe Alarcon, an
economist at EuroAmerica.
Earlier on Thursday, the South American country reported its
weakest quarterly growth since the 2009 financial crisis,
although that was largely caused by one-off factors.
Nonetheless, the economy has struggled with weak investment
on the back of the global commodities slowdown and business
worries about local policy uncertainty.
(Reporting by Santiago bureau; Writing by Rosalba O'Brien;
Editing by Sandra Maler)