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UPDATE 1-Chile cenbank 'prepared to deepen' expansionary policy -governor
November 7, 2017 / 5:43 PM / 17 days ago

UPDATE 1-Chile cenbank 'prepared to deepen' expansionary policy -governor

(Adds comments from central bank president on inflation, growth)

SANTIAGO, Nov 7 (Reuters) - Chile’s central bank’s decision to leave its benchmark interest rate unchanged at 2.5 percent in October was unanimous, but the committee considered a 25-basis-point cut, minutes of the most recent monetary policy meeting published showed on Tuesday.

“There had not been a substantial change from what was expected in September, but the risks to inflation’s convergence had accentuated,” the central bank said in its October minutes. The discussion came as inflation is taking longer than expected to rise toward the central bank’s target.

Speaking at a business forum, central bank Governor Mario Marcel said the risk of lower inflation in the short term remained, but that the committee “is prepared to deepen its expansionary monetary policy stance.”

Marcel said the economy would show strong year-over-year growth through at least April 2018 in part due to a low base of comparison, after investment in the mining sector - the source of most of the South American country’s exports - fell in the second half of last year.

“The fall in mining investment seems to have hit bottom,” Marcel said. “We will only verify the true strength of the economy’s capacity to sustain a rhythm of significant growth in the second half of next year, when the ‘bonus’ of comparing against a relatively weak base will disappear.” (Reporting by Antonio de la Jara and Felipe Iturrieta; Writing by Luc Cohen; Editing by Jeffrey Benkoe and Dan Grebler)

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