Banco Centralde Chile on July 14 maintained its monetary policy interest rate at3.5%, a level that has remained constant since the bank the rate in December 2015.

Annual inflation in Chile stood at 4.2% in June, slightlyabove the central bank's target range of between 2% and 4%, according toReuters.

"Second-quarter output and demand data confirm limitedgrowth," the central bank said in a statement announcing the decision."Confidence indicators are still in pessimistic territory. The labormarket continues to reflect deterioration in comparison to early in the year."

Earlier in July, the Chilean government its GDP growth forecast for 2016to 1.75% from a 2% estimate made in March. A recent survey by the central bankshowed that financing conditions remained tight in the second quarter, whileloan demand was weakercompared to the linked quarter.