Central Bank of Chile

November 13, 2012

For a tenth monthly meeting in a row, monetary policymakers left Chile’s policy central bank rate at 5.0%.  Their latest statement speaks in cautious tones about trends in the world’s developed economies, noting some tightening of global financial conditions since the meeting in October.  The statement observes “more positive signals in some emerging economies” and is quite upbeat regarding the domestic Chilean economy, where output and demand are tracking above the forecast of policymakers and labor market conditions remain tight.  Core Chilean CPI inflation is below the 3% target, and expected inflation is aligned with that goal.  Officials are not worried about a rise in headline CPI inflation last month, attributing such to “one-time” factors. 

The last two policy rate changes were a 25-basis point cut last December and a 25-bp hike in June 2011 that culminated a 12-move tightening cycle from 0.5% prior to June 2010 to a peak of 5.25%.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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