Chile central bank only considered rate cut of 25bps at October meeting, minutes show
Adds details in paragraphs 4 and 5
SANTIAGO, Nov 5 (Reuters) -Chile's central bank said the only plausible option was lowering the country's benchmark interest rate by 25 basis points at its October meeting, the meeting minutes showed on Tuesday.
The bank cut borrowing costs by 25 basis points to 5.25% on Oct. 17, in line with market expectations, in a unanimous vote. The interest rates in the Andean country have now gone down575 basis points from a high of 11.25% in July 2023.
"The option of 25 bps was consistent with the macroeconomic scenario, and also tactically the most appropriate," the minutes said.
Analysts polled by the bank last month had predicted the 25-basis-point cut, pointing to lower risk of more medium-term persistency in inflation as related to shocks. They predicted the rate will hit 4.75% within five months.
Consumer prices in Chile rose less than expected in September, a month in which inflation usually tends to be higher due to national holidays, paving the way for the central bank to keep reducing borrowing costs. However, the central bank minutes said that scenarios in which inflation was more persistent than usual could not be ruled out.
Reporting by Natalia Siniawski and Fabian Cambero; Editing by Alexander Villegas
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