April 5 (Bloomberg) -- Chile's peso rose to a two-week high after a central bank report showed the economy grew at its fastest pace in nine months in February.

``Capital inflows are going into the economy because of expectations for economic growth,'' said Alfredo Coutino, senior Latin America economist at Moody's Economy.com in West Chester, Pennsylvania.

The peso strengthened 0.2 percent to 536.53 per dollar, reaching its strongest since March 22. The currency has gained 1.6 percent since the start of February, bolstered in part by surging prices for copper, Chile's top export. Coutino forecasts the peso may reach 525 per dollar by the end of 2007, its strongest level since December.

The central bank's economic activity indicator rose 5.7 percent in February, more than the 5.3 percent increase in January, the central bank said on its Web site.

Futures contracts for the metal have risen 39.8 percent since Feb. 5. Copper for delivery in May fell 1.05 cents, or 0.3 percent, to $3.3770 a pound today on the Comex division of the New York Mercantile Exchange.

Faster economic growth will likely keep Chile's central bank from lowering its overnight lending rate in coming months, Coutino said. Policy makers considered a rate cut at their last meeting in March, according the meeting minutes published yesterday.

To contact the reporter on this story: Matthew Walter in Santiago at mwalter4@bloomberg.net

Last Updated: April 5, 2007 17:00 EDT