Chile's central bank lowered its benchmark interest rate for the first time since January 2012 to stimulate economic growth.

The board of the Central Bank of Chile on Thursday decided to lower the monetary policy interest rate by 25 basis points to 4.75 percent, the bank said in a statement.

Chile's economic activity has proceeded at a moderate pace in recent months, the bank said. Domestic demand has reduced its rate of expansion and indicators suggest that it will decelerate further, it noted.

Inflation has evolved below projections, remaining in the lower part of the tolerance range, while market expectations foresee a slower normalization towards 3 percent, the bank said.

It also said that the fiscal agreement reached in the U.S. is temporary and therefore further financial tensions cannot be ruled out.

RTTNews