(Reuters) -Chile's central bank cut its benchmark interest rate on Thursday by 50 basis points to settle at 9.00% in a unanimous decision, as the South American nation's monetary authority sees inflation pressures easing.
Inflation in the world's largest copper-producing country has fallen faster than market expectations for months, ticking down to 5.1% in annual terms in September from 5.3% the previous month and a peak of 14.1% in August 2022.
The 50-basis-point rate cut was smaller than the 75-basis-point reduction expected by analysts in a central bank poll.
The bank's board cited "global developments."
"The international scenario shows a deterioration in financial conditions, combining real, financial factors and geopolitical risks," the bank said in a statement.
The bank also said in the statement that given "growing tensions" in global financial markets, the board agreed to suspend a $10 billion program to replace and increase the country's international reserves, announced last June.
Chile's central bank aggressively hiked the key interest rate by 1,075 basis points between July 2021 and October 2022 in a bid to beat back spiraling inflation and held it steady at a cycle-high of 11.25% until a widely-expected reduction in July.
The Andean country kicked off its monetary easing cycle in July with a larger-than-expected 100-basis-point rate cut and reduced rates again in September, but this time by 75 basis points.
(Reporting by Fabian Cambero and Brendan O'Boyle; Editing by David Alire Garcia and David Gregorio)
