SANTIAGO, April 26 (Reuters) - Chile’s central bank considered only keeping its key lending rate on hold this month, as it weighed external economic risks against strong but slower local growth, the minutes of April’s monetary policy meeting showed on Friday.
All five members of the bank’s governing board voted to keep the rate steady at 5 percent on April 11, where it has been held since a surprise cut in January 2012.
The bank’s board members “emphasized that it was still early to reach conclusions using the (activity) data and that it was necessary to await more information that would allow the confirmation of a decelerating tendency,” the minutes said.
Chilean manufacturing output is expected to grow at a mild pace for the second month in a row in March, as growth in the food and beverages industries is offset by fewer working days, a Reuters poll showed on Wednesday.
One board member pointed out that industrial production data and partial data for the construction sector “supported the hypothesis that growth was in a process of normalization,” according to the minutes.
Several board members mentioned the peso’s appreciation, according to the minutes.
The peso in early April had climbed to levels that had triggered a central bank currency intervention in early 2011 to stem its strength. It has since given up those gains in large part as the global economic outlook has soured and prices for the country’s top export copper have tumbled.
The peso typically moves in line with copper prices, as higher prices mean more dollars entering the local market due to sales of the metal. The inverse is true of lower prices.