Central Bank of Chile

February 14, 2017

A 25-basis point cut of Chile’s central bank interest rate to 3.25% had been the first reduction since October 2014. In between there were two 25-basis point increases in the final quarter of 2015. At its February meeting today, the central bank Board elected not to reduce the rate further this month but signaled a possible future move in a released statement: “The Board estimates that, in the most likely scenario, it will be necessary to boost the monetary impulse over the short term.” The statement notes that actual inflation has recently been in line with expectations, that long-term expected inflation is still hovering near the central bank’s 3.0% target, and that the trends in production and domestic demand have been weak. The peso has risen, and the persistence of significant global risks is mentioned, too.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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