UPDATE 1-Chile economy ready for rate hikes – finance min

* Government sees economy weathering pace of rate hikes

* Central bank seen raising key rate 25 basis pts Tuesday

* Economy recovering from massive February earthquake
(Updates with finance minister comment)

SANTIAGO, June 15 (BestGrowthStock) – Chile’s Finance Minister
Felipe Larrain said on Tuesday he did not expect the pace at
which the central bank raises its benchmark lending rate to
hurt the economy as it recovers from a global crisis and a
massive earthquake.

Chile’s central bank is widely expected to raise its key
rate by 25 basis points from an all-time low of 0.5 percent on
Tuesday to 0.75 percent in what would be the first increase in
nearly two years. For a preview see [ID:nN14138024].

“We do not expect the pace of rate (increases) to affect
the economy,” Larrain told reporters. “We think the economy
will perform well.”

“A rate of 0.5 percent is not normal, it is an exceptional
situation,” he added. “As the Chilean economy grows, the rate
will normalize.”

Data last week showed Chile’s economy surged in April as it
recovered from the ravages of the Feb. 27 quake, reinforcing
expectations for a 25-basis-point rate hike. [ID:nN07188492]

Inflation rose faster than expected in May on higher fuel,
transport and food costs. [ID:nN08246217]

Investment Basics
(Reporting by Alonso Soto and Antonio de la Jara; Editing by
Simon Gardner and James Dalgleish)

UPDATE 1-Chile economy ready for rate hikes – finance min