(Bloomberg) -- Chile’s peso surged as local markets reopened after the central bank’s surprise decision to slow down the pace of interest-rate cuts last week.

The peso jumped 2.8% to 907.1 per US dollar as of 9:45 a.m. New York time on Monday, according to local pricing data compiled by Bloomberg. 

It was the first trading session in Santiago since late Thursday when the central bank lowered borrowing costs by half a percentage point to 9%, as expected by just five of 22 analysts in a Bloomberg survey. Sixteen others had forecast a 75-basis point cut. 

Read More: Chile Surprises by Slowing Easing Pace, Halting Dollar Purchases

In a statement accompanying the decision, policymakers wrote that they opted for a smaller rate cut as financial conditions have deteriorated worldwide. The central bank board also agreed to suspend its program to build up international reserves through dollar purchases that have contributed to the peso’s slide. 

“The program was part of the reason why the Chilean peso has underperformed the region so dramatically,” said Brad Bechtel, the global head of foreign exchange at Jefferies LLC in New York. “The CLP is getting some relief in a decent environment for carry trades.”

US-traded Chilean assets, including the $508 million iShares MSCI Chile ETF, jumped on Friday, when domestic markets were closed for a holiday. Other currencies from countries often seen as a destination for carry traders such as Colombia, Mexico and Hungary also climbed on Monday. 

Despite Monday’s gains, the Chilean peso is still down more than 6% since the beginning of the year. The outlook for the country’s credit score was recently cut by S&P Global Ratings on potential threats to its economic growth. 

--With assistance from Vinícius Andrade.

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