Monetary Policy on Hold at Central Bank of Chile

June 14, 2018

The monetary policy rate has been 2.5% since four 25-basis point cuts implemented within the first five months of 2017, and yesterday’s decision announced late in the day again resulted from a unanimous vote. Officials released a statement that revised the near-term inflation forecast upward due to oil price developments and a depreciated Chilean peso, but overall gist of these changes doesn’t change the big picture. ” Notwithstanding, CPIEFE inflation will have a similar path to the one forecasted in March in a line with an economy that still has capacity gaps. The Board foresees that the monetary stimulus will be kept around its current levels and will start to decrease as macroeconomic conditions keep driving inflation convergence towards
3%. Thus, the Board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year policy horizon.”

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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