Chile’s central bank lowered its benchmark interest rate by 25 basis points to 3 per cent, in line with economists’ expectations, and signalled that it could further reduce borrowing costs.
“The Board estimates that, if the recent trends of the economic scenario persist, and so do their implications on the medium-term inflation outlook, it could be necessary to increase the monetary impulse,” the central bank said in a statement.
The move comes as consumer prices slowed to 2.7 per cent in February, from 2.8 per cent the previous month and as “activity and demand indicators remain weak” in the domestic economy. Moreover, while the unemployment rate has remained stable “salaried employment deteriorated further”.
The central bank last cut rates by 25 basis points in January as inflation has continued to decelerate and giving it room to grow.