SANTIAGO: Chile's central bank is expected to again keep its key interest rate on hold later this week, as analysts have pushed back their bets for a cut amid a recent slew of upbeat local data, a Reuters poll showed on Monday.
The bank on Sept. 12 will likely keep the benchmark rate flat at 5.0 percent, where it has been since January 2012, according to 12 of the 14 analysts and economists polled. Two said the bank would cut the rate by 25 basis points to 4.75 percent.
"Until recently, we projected the central bank would embark on a contained easing cycle of 2 to 3 rate cuts of 25 basis points each, starting most likely in September," Tiago Severo at Goldman Sachs said in a note to clients.
But Severo said he now sees the bank holding the rate steady later this week in part as "private consumption actually accelerated in the second quarter."
Meanwhile, unemployment recently hit a low not seen in years, manufacturing production posted a surprise bounce in July, along with retail sales, and consumer prices have remained near the bottom end of the central bank's 2 to 4 percent target range.
The central bank has weighed cutting the key rate at its last four policy meetings. In August, all five members of the bank's governing board ultimately voted to keep it steady, minutes of that meeting showed.
Last week, the bank cut its forecast range for 2013 gross domestic product growth but maintained inflation and domestic demand predictions as the effects of a slowdown hitting the top copper exporter are moderated by buoyant consumer spending.
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