Bank of Chile and Central Reserve Bank of Peru

May 14, 2015

Chile’s key interest rate was left at 3.0%, its level since a 25-basis point cut last October.  That was the sixth reduction in 2014.  Although inflation of 4.2% exceeds the 3% target, officials expect such to converge downward on the target and note that expected inflation remains well-anchored.  Peru’s central bank rate is 25 basis points above Chile’s even though Peruvian inflation is about 1-1/4 percentage point lower than Chile’s.  While officials at the Central Reserve Bank of Peru kept the 3.25% interest rate but lowered the reserve requirement by another half percentage point to 7.0%.  The last change in the Peruvian central bank interest rate was engineered this past January.  Three earlier cuts, all by 25 basis points, were done in November 2013, July 2014, and September 2014.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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