SANTIAGO, April 2 Reuters Chile39;s central bank cut its benchmark interest rate on Tuesday by 75 basis points to 6.50, in a unanimous decision by its governing board, saying the rate would likely be reduced further.

The cut is in line with forecasts in a traders39; poll last week, which also predicted the bank will reduce the rate to 4.25 within 12 months.

In a statement, the bank said it foresees further monetary policy rate cuts, with the size and timing of those moves taking into account the evolution of the macroeconomic scenario and its implications for the trajectory of inflation.

The bank39;s statement tweaked its forward guidance, removing language from its January statement that predicted the rate reaching its neutral level in the second half of 2024.

The removal of the sentence adds a hawkish flavor to the bank39;s 75basispoint cut, J.P. Morgan analyst Diego Pereira said in a note to clients.

The South American nation39;s central bank raised interest rates from 0.50 in mid2021 to a cyclehigh of 11.25 in late 2022. The bank held at that rate before kicking off monetary easing in July as inflation began to cool.

Chile39;s annual inflation peaked at 14.1 in August 2022 and came down to 3.9 at the end of 2023. It has since gone back up, reaching 4.5 in February.

The central bank39;s board on Tuesday added that inflation expectations are aligned with its 3 target, and rising inflation figures at the beginning of the year and higher imported cost pressures…