Chile: Central Bank keeps policy rate on hold
January 16, 2014
At its 16 January meeting, the Central Bank decided to maintain the policy rate at 4.50%. The decision was broadly in line with market expectations. This, the second meeting in which the Bank decided to keep the policy rate unchanged, followed two consecutive meetings in which the policy rate was cut by 25 basis points each time. According to the Bank, Chile's economy has displayed moderate growth dynamics in the past few months, mainly due to domestic demand having grown less than expected. In terms of price developments, the Bank added that, "inflation expectations remain around the target over the projected horizon, and the pace of nominal wages' growth shows a moderation in recent months. LatinFocus Consensus Forecast panelists see the policy rate at 4.50% by the end of the year. Panelists expect the policy rate to end next year at 4.06%.
Author: Dirina Mançellari, Senior Economist