The board of Chile's central bank decided to keep the monetary policy interest rate on hold at 2.5%, saying the data in its March report suggest that the risk for inflation to inch closer to 3% has moderated.

Banco Central de Chile said inflation expectations showed no big changes from the data analyzed in the board's last meeting, although short-term expectations were adjusted downward.

The central bank said, however, that the evolution of the exchange rate in the coming months will cause lower inflation rate in December, which the bank will continue to monitor with "special care."

The bank added that it will continue to conduct monetary policy with flexibility for projected inflation to stand at 3% over the two-year period.