By Nathan Gill

March 17 (Bloomberg) — Banco de Credito e Inversiones, Chile’s fourth-largest lender, rose to the highest in two weeks in Santiago trading on speculation lower interest rates will boost lending.

    
BCI, as the bank is known, gained 2.6 percent to 11,390 pesos. Larger rivals Banco Santander Chile and Banco de Chile both rose more than 2 percent.

    
“Chilean banks are beginning a strategy of taking the central bank’s rate reduction and applying it immediately to short-term consumer rates,” Nicolas Buccicardi, an investment analyst at Wealth Advising Co. in Santiago, said by phone. “These aggressive cuts create incentives for consumers to take on debt.”

    
BCI has gained 7 percent in the three sessions since policy makers cut the overnight rate to 2.25 percent, the lowest since December 2004.

    
Chilean central bank President Jose De Gregorio said yesterday that policy makers’ decision to slash lending rates this year is being matched by domestic banks. The 5-point reduction in the past two months is the sharpest since the bank started using that interest-rate measure 15 years ago.

    
BCI probably will rise to 11,700 pesos by the end of 2009, according to Wealth Advising Co. Banco Santander Chile, the country’s biggest lender, climbed 2.8 percent to 19.95 pesos while Banco de Chile, the second-largest bank, added 3.1 percent to 36.5 pesos.