Central Bank of Chile: Again No Rate Change

March 15, 2013

Chile’s monetary policy interest rate was kept at 5.0%, the level since a 25-basis point cut authorized in January 2012, which at the time was the first change in over two years.  In its released statement, Central Bank of Chile officials note that

  • Domestic demand and output have recently exceeded what officials were assuming.  Chile has one of Latin America’s fastest growth rates.  GDP went up 5.6% last year and should be near to 5% in 2013.
  • The peso is somewhat firmer against a number of other currencies.
  • The prices for copper and other commodities have receded a bit lately.
  • Headline and core inflation remain low.  Total CPI rose 1.3% in the year to February, less than the 3% +/-1% target range.
  • Inflation expectations are consistent with the central bank’s target.
  • Future developments will be analyzed for their potential impact on inflation vis-a-vis the 2-4% target corridor.  Policy will respond accordingly.

The statement reflects comfort with the present policy stance and shows no preconception about the direction or timing of the next interest rate change.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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