By Nathan Gill

     July 13 (Bloomberg) — Empresas La Polar SA, a Chilean retail company that targets middle-income earners, climbed the most in two weeks on speculation that central bank measures to reduce credit costs will boost consumer demand.

     The department-store owner rose 2.6 percent to 1,940 pesos in Santiago trading, extending a three-day advance to 6 percent. Today’s gain was the biggest since June 25.

     Chile’s central bank cut its benchmark interest rate to a record 0.5 percent last week and offered banks that same rate for loans of up to six months in a bid to pull South America’s fifth-biggest economy out of its deepest slump in a decade. Central bank President Jose De Gregorio said July 10 that policy makers’ steps should lead to less expensive consumer loans.

     “With the new measures it means that the lowering of the central bank’s interest rate will have a faster effect on consumer credit,” Trinidad Bone, an analyst at BCI Corredor de Bolsa, said in a telephone interview from Santiago. “This means a greater reactivation of the company’s financial business because people are more willing to take out loans because the rates are lower and cheaper, generating higher expectations of growth in that line of La Polar’s business.”

     SACI Falabella SA, Chile’s biggest retailer by market value, and Cencosud SA, the largest retailer by sales, also advanced. Falabella gained 5.2 percent to 2,135 pesos, its steepest rally since Nov. 13. Cencosud climbed 3.1 percent to 1,430 pesos, the most in eight weeks.