Central Bank of Chile

May 15, 2014

Although keeping the monetary policy rate of 4.0% unchanged as they did also a month ago, monetary authorities spoke about monitoring above-target inflation with a greater sense of vigilance in this month’s statement.:  “The most likely scenario assumes that the rise in inflation —associated with the peso depreciation, among other factors— is a temporary development, that will continue to be monitored with special attention” (bold added).  Total CPI inflation accelerated from 3.5% in March to 4.3% in April, and core CPI and wage inflation also picked up.

The last policy rate change, a 25-basis point cut in March, culminated a sequence of five such reductions dating back to January 2012.  In the year to June 2011, the rate was lifted to 5.25% from 0.5% where such had been from July 2009 until June 2010.  Before 2009, such had peaked at 8.25%.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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