Reuters: US Dollar Report: UPDATE 1-Chile cenbank only weighed rate hold in Oct.- minutes

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UPDATE 1-Chile cenbank only weighed rate hold in Oct.- minutes Nov 6th 2012, 12:19 Tue Nov 6, 2012 7:19am EST * Rate held at 5.0 pct for 9th straight month in Oct * Cbank says rates remains within neutral range * Domestic demand remains strong - cbank SANTIAGO, Nov 6 (Reuters) - Chile's central bank only considered keeping its key interest rate on hold as an option in October, when it held it steady at 5.0 percent for a ninth consecutive month, as expected, minutes of the meeting showed on Tuesday. The rate remains within a neutral range and the decision to keep the rate steady was unanimous, the minutes said. "Regarding the Chilean economy's performance, all the board members highlighted the strength of domestic demand, and in particular consumption," the minutes added. Chile's central bank held its key interest rate steady last month as a buoyant domestic economy helped keep external risks at bay. The key interest rate is seen staying at 5.0 percent in November and in the next three, six, 12 and 24 months, the bank's fortnightly poll of traders showed late last month. Firm domestic demand, a tight labor market and relatively healthy prices for main export copper have kept Chile's small, export-dependent economy growing at a brisk pace despite slowing demand in top trade partner China and fallout from the euro zone debt crisis. Chile's economy this year may post growth of slightly more than the official forecast of 5 percent, Finance Minister Felipe Larrain told Reuters on Monday, but he stuck with a growth outlook for 2013 of 4.8 percent, noting that Chile faces slowing exports to Europe. Unlike in previous months, the central bank's minutes made no mention of the peso, which has appreciated around 7.7 percent versus the dollar this year. The peso's strength remains a worry but it isn't the moment to intervene in the foreign exchange market to stem its appreciation, central bank president Rodrigo Vergara said in late October. The central bank deployed a dollar-purchasing program last year, which lasted through December, to curb peso strength after the currency appreciated to its highest level in more than 2-1/2 years at 465.50 per dollar. Link this Share this Digg this Email Reprints

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