Chilean Central Bank Interest Rate Cut by 50 Basis Points in Unanimous Decision

September 4, 2019

The Central Bank of Chile became the latest monetary authority to cut interest rates in the face of a deteriorating global landscape. Chile’s monetary policy rate was cut by 50 basis points for the second time in three months and now becomes 2.0%, its lowest level since early September of 2010. The vote to ease was unanimous, and a released statement cites several risks:

The trade conflict is compounded by the greater likelihood of a non-deal exit of the United Kingdom from the European Union, various geopolitical risks and a severe deterioration of the situation in Argentina. … Financial markets continue to show high volatility and risk aversion. Thus, further declines in interest rates were observed in the fixed-income market, together with stock market relapses, depreciation of most currencies against the dollar and widespread falls in commodity prices. Inflationary figures remain contained in many economies around the world.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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