Banco Central De Chile Holds Rate At 5.00%

CentralBankNews
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The Banco Central de Chile kept its monetary policy interest rate unchanged at 5.00%.  The Bank noted: “Domestically, economic activity and domestic demand have tended to outperform forecasts from the latest Monetary Policy Report. The labor market remains tight and nominal wages show increased dynamism. Credit market conditions are stable. Y‐o‐y CPI inflation is above the tolerance range, while core inflation measures are around 3% annually. Short term inflation expectations have risen, but remain around the target over the projection horizon.”

Chile’s central bank last cut the monetary policy interest rate by 25 basis points to 5.00% at its January meeting.  The Bank last raised its monetary policy interest rate by 25 basis points to 5.25% at its June meeting last year.  Chile reported annual consumer price inflation of 4.2% in January this year, compared to 3.7% in October, 3.3% in September, 3.2% in August, 2.9% in July, 3.4% in June, 3.3% in May and 3.2% in April last year; within the Bank’s inflation target of 2-4%.  

The Chilean economy grew 0.6% in the September quarter (1.4% in Q2, 1.6% in Q1), placing annual GDP growth at 4.8% (6.6% in Q2, 9.9% in Q1).  The Chilean Peso (CLP) has gained about 1% against the US dollar over the past year, while the USDCLP exchange rate last traded around 483.

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