Central Bank of Chile Interest Rate Lowered to 2.50%

May 18, 2017

The central bank Board made its fourth 25-basis point interest rate cut of 2017 today, following similar moves in January, March and April. January’s reduction was the first change since a pair of 25-basis point increase in October and December of 2015 and the first reduction since October 2014. A statement released after the May monthly meeting mentions lower copper prices, persistent risks, and longer-term inflation expectations that are aligned with the 3% target at the end of the forecast horizon. CPI inflation is now 2.7%. Chile’s interest rate move contrasts with a Mexican central bank hike announced earlier today. Peru’s central bank a week ago reduced its interest rate.

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