National Statistics Institute data indicated inflation was a continuing problem. Consumer prices rose 0.3 percent in April from March, data from the institute showed. The annual inflation rate reached 3.2 percent, down from 3.4 percent a month earlier, and 1.6 percent overall for the first four months of 2011.

Chile, like Brazil, is awash with foreign investors wanting to capitalize on the booming economy and attractive interest rates. That's good for investment promotion sectors of the government but a headache for central bank regulators who see the inward investments being reflected in the peso's climb against the U.S. dollar.

The Chilean central bank estimated annual inflation will exceed its target range of 2 percent to 4 percent by year-end because of rising prices, especially those for food and fuels.

Although April price data and downward trends in oil prices indicated that Chile's inflationary pressures could be subsiding, the regulators would like to see improved indicators.

Some respite in inflation is seen by market analysts as a window of opportunity for the regulators to fine-tune interest rates to reach a balance where the monetary intervention can help and not hinder the government's fight to keep the economy ticking over in a more balanced way.

Recent trends alarmed analysts who saw the potential for unbalanced or uneven growth, with unforeseeable consequences.

Industrial production in Chile increased at the fastest ever pace in the 12-month period ended March, official data indicated. Industrial output climbed a record 30.9 percent in the year ended March, marking the biggest growth in the history of the indicator. In February, output rose 1.9 percent.

Chile's woes echoed concerns voiced by central bankers at a Bank for International Settlements meeting, where overheating of emergent economies dominated the agenda.

European Central Bank President Jean-Claude Trichet told reporters central bankers saw the linkage between the overheating of emerging market economies because of fluctuations in commodity prices and global recovery trends.

"We have this issue of commodity prices and oil and energy prices in particular with a level of volatility that we can see recently," Trichet said. "We consider this is an issue which is of great importance," he added, pointing out that the price doldrums could have "a great impact" globally on the consumer price index.

Chilean government economists have cited the link between rising energy prices and domestic inflation. Other analysts said the extraordinary capital inflows also played a part in fueling inflation.

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