UPDATE 1-Chile cbank only weighed rate hold in March- minutes
* Cbank unanimous on decision to keep rate at 5 pct * Minutes flag risks of dynamic local demand, output * Cbank weighing local strength against global risks SANTIAGO, April 1 (Reuters) - Chile's central bank only considered the option of keeping its key lending rate steady last month, underlining that dynamic domestic demand and activity present risks going forward, the minutes of March's monetary policy meeting showed on Monday. All five members of the bank's governing board voted to keep the rate steady at 5 percent on March 14, where it has been held since a surprise cut in January 2012. The bank's hands are seen tied, as the entity weighs persistent global risks to Chile's export-dependent economy against buoyant local economic growth. "All the Board members agreed that the scenario analyzed posed a dilemma for monetary policy making, because there were opposing forces recommending decisions in opposite directions. Nevertheless, they concluded that the right decision was to keep the (rate) at 5 (percent)," the bank said in its minutes. LOCAL RISKS Chile's booming domestic demand has triggered fears of a growing current account deficit and even of overheating among some analysts. "With respect to the local economy, all the Board members commented on the strength of output and especially domestic demand because of the risks it could pose going forward," the bank added. Central bank board member Enrique Marshall said last month the main local risk to Chile's economy is that growth in domestic demand continues to outpace gross domestic product growth. However, strong local consumption has not triggered price pressures so far.