Chile's central bank on Thursday cut its benchmark interest rate by 25 basis points to 5.25%, extending an easing cycle since the middle of last year, and predicted further cuts ahead if the copper-producing country's economic picture remains stable.

Chile’s central bank cut its key interest rate by a quarter-point for the second straight meeting and signaled borrowing costs will keep falling to a neutral level as the economy struggles to gain traction.

The decision came after new figures showed inflation across the bloc had fallen to its lowest level in more than three years.