UPDATE 2-Chile central bank considered 75 or 100 basis point cut in April- minutes

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April 17 (Reuters) - Chile's central bank considered reducing the country's benchmark interest rate by 75 or 100 basis points at its April meeting, bank minutes showed on Wednesday. However, all board members agreed that a 75 basis point cut "provided greater degrees of freedom in the event that some assumptions in the central scenario failed to materialize as expected", the statement added.

In addition, the board's reduction coincided with what markets expected, avoiding surprises that could affect the transmission of the Board's assessment of macroeconomic conditions and the expected path of inflation.

The monetary authority in April reduced its key rate to 6.50% from 7.25% in a unanimous decision by its governing board, saying the rate would likely be reduced further.

According to the Central Bank of Chile, the economy is grappling with weak domestic demand despite recent improvements. Peso depreciation and global cost shocks have added pressure on prices, but these are expected to ease within the monetary policy horizon.

The bank remains firm in its strategy to significantly reduce the monetary policy rate in the first half of the year, with April's meeting seeing a continued swift reduction from levels still considered above neutral.

The South American nation's central bank raised interest rates from 0.50% in mid-2021 to a cycle-high of 11.25% in late 2022. The bank held at that rate before kicking off monetary easing in July as inflation began to cool. (Reporting by Fabian Cambero and Natalia Siniawski, Editing by Louise Heavens and Chizu Nomiyama)