UPDATE 1-Chile annual inflation slows to 0.9 pct, lowest in years

Fri Jun 7, 2013 9:08am EDT

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SANTIAGO, June 7 (Reuters) - Chile's consumer price index
 was unchanged in in May, coming in below a forecast
0.1 percent rise, as falls in prices of housing, water,
electricity and fuel were offset by increases in foods and
non-alcoholic beverages, the government said on Friday. 
    Inflation in the 12 months through May came in at 0.9
percent, below the bottom end of the central bank's 2 percent to
4 percent tolerance range and the lowest since at least January
2011, when a new methodology was adopted.
    Low inflation and a sharper-than-forecast economic slowdown
led the central bank to consider lowering its key interest rate
 from its current 5 percent in May. 
    Chilean traders are forecasting a quarter-percentage point
rate cut to 4.75 percent in 12 months' time, a central bank poll
released last month showed.  

 
    Core inflation was 0.1 percent in May, the INE statistics
agency added on Friday. 
    Elsewhere in the region, Brazil's benchmark IPCA consumer
price index rose 6.50 percent in the 12 months
through May, nearly unchanged from 6.49 percent in April and in
line with analysts' forecasts, government statistics agency IBGE
said on Friday.
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