Chile central bank mulled 150 point rate increase at May meeting, minutes show

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FILE PHOTO: A security worker gestures while closing the door of the Chilean Central Bank building in downtown Santiago

SANTIAGO (Reuters) – Chile’s central bank considered raising the benchmark interest rate by up to 150 basis points at its last meeting due to persistent inflationary pressure, according to meeting minutes released by the bank on Friday.

The central bank eventually decided to raise its Monetary Policy Rate (MPR) by 125 points to 8.25%, which was still more than expected by the market.

The bank’s council weighed options that ranged from 100 to 150 basis points.

“All the directors agreed that the option of 125 base points was the one that allowed the best way to communicate the change in the inflationary scenario, signaling a special concern for the persistence of inflation,” the meeting minutes revealed.

(Reporting by Fabian Cambero; Writing by Alexander Villegas)