Chile: Central Bank holds rate at 3.50% in February
February 11, 2016
At its meeting on 11 February, the Central Bank of Chile (BCCH) decided to leave the policy rate unchanged at 3.50%. The Bank held the rate at its current level in January, following December’s 25-basis-point hike.
As for the international environment, the Bank highlighted that global commodity prices continued to fall, that risk premiums increased and that stock exchanges recorded steeper declines. The Bank added that many currencies recently regained some strength against the U.S. dollar. The Bank went on to note that the global growth outlook weakened and that some central banks recently eased monetary policy.
Regarding Chile, the BCCH stated that inflation exceed expectations ant remained above 4.0% in January. However, inflation expectations for a two-year horizon stand at 3.0%, in line with the Bank’s target. The Bank added that several economic indicators point to sluggish dynamic in the Chilean economy and that confidence indicators remained in negative territory. On a positive note, unemployment continued to decrease.
In conclusion, the Bank stated that its monetary policy will remain focused on bringing inflation to the target. Moreover, the Bank emphasized, “its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the policy horizon.” The next monetary policy meeting is scheduled for 17 March.