Central Bank of Chile Reduces Key Rate by Additional 250 Basis Points

February 13, 2009

A week after cutting its benchmark rate by 100 basis points to 7.25%, the Chilean Central Bank slashed it to 4.75%.  A released statement pointed to a significant and greater-than-expected drop of inflation and a bigger emergence of excess aggregate supply that will promote a continuing ebbing of inflation. All this is happening against the background of a severe global recession.  Looser monetary policy is appropriate and possible given with inflation not being the concern it was.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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