Chile: Central Bank cuts policy rate at second meeting in a row
November 19, 2013
At its 19 November meeting, the Central Bank decided to cut the policy rate by 25 basis points for the second consecutive meeting. The Bank lowered the rate from 4.75% to 4.50%, a decision which was widely expected by the market.
The Bank acknowledged that economic activity in the country has evolved at a moderate pace primarily due to weak domestic demand. In addition, the Bank stated that inflation is also moving at a moderate pace. Inflation is, however, expected to approach the midpoint of the Bank's target range of 2.0%-4.0% within the next 24 months. As a result, the Monetary Policy Committee decided to conduct flexible monetary policy by cutting the policy rate.
LatinFocus Consensus Forecast panelists see the policy rate at 5.01% by the end of the year. Panelists expect the policy rate to end next year at 5.06%.
Author: Dirina Mançellari, Senior Economist