Central Bank of Chile

October 16, 2015

Chile’s monetary policy rate was lifted by 25 basis points to 3.25%.  This was the first increase since June 2011.  In between, the rate had been lowered nine times by 225 basis points in all.  The first of those cuts occurred in January 2012, and the last one was done a year ago in October 2014.  A statement from officials noted that inflation of 4.6% in September still significantly exceeded target even though being down 0.4 percentage points from August’s on-year pace.  Neither this dip nor weak domestic demand indicators deterred the rate hike, since inflation is expected to remain high. making the highly expansive monetary stance no longer appropriate.  Officials will continue to monitor expected inflation closely and will probably be tightened further, the path of which is to be guided by forthcoming news bearing on the outlook for Peruvian inflation.

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



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