Chile central bank holds interest rate at 4.75% as core inflation sticks

SANTIAGO, Sept 9 (Reuters) - Chile's central bank on Tuesday held its benchmark rate at 4.75% in a unanimous vote, in line with analysts' expectations, even as the monetary authority warned that higher-than-expected core inflation meant the economy must be closely monitored.

In its September monetary policy report, the bank said that although headline inflation forecasts remained steady, core inflation - which strips out some volatile products - was now seen higher over the next 12 months than previously estimated in June.

"Given this component of the Consumer Price Index tends to be more persistent, there is a growing need to closely monitor its evolution and fundamentals," the bank said in a statement.

The bank also pointed to mixed signals in the labor market, with strong wage growth but slow job creation.

Outside Chile, the bank said tariff measures from the United States continue to fuel uncertainty and precautionary changes in trade decisions have made it difficult to evaluate their mid-term impacts.

Tuesday's decision comes after the central bank lowered the rate by 25 basis points at the end of July, its first cut of the year. The rate has come down from a peak of 11.25% it held through the first half of 2023.

The central bank said more information was needed before continuing its process of converging the rate towards a neutral range.

On Monday, Chile's statistics agency reported an August 12-month inflation rate that eased to 4%, coming into the central bank's target range of between 2% and 4%.