Chile central bank board divided on rate decision

SANTIAGO, June 2 Chile’s central bank board was
divided on a decision to cut the benchmark interest rate
by 25 basis points to 2.50 percent at a
policymaking meeting on May 18, minutes from that meeting
showed.

Board member Joaquin Vial voted to keep the rate on hold,
while the other four bankers opted for the cut.

“One board member expressed doubts that additional monetary
stimulus was needed,” the minutes said, pointing to recent
positive indicators in domestic consumption, salaries and
consumer confidence.

Polls ahead of the decision had shown a majority in the
market expecting that rates would be held unchanged.

Nonetheless, a rate cut had been forecast for the near
future, and after the move, the bank adjusted its bias to
neutral, indicating that its easing cycle was over.

The bank has cut the interest rate 100 basis points since
the start of 2017, as it seeks to stimulate weak growth and
investment in the top copper exporter.

(Reporting by Rosalba O’Brien; Editing by Bernadette Baum)

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