Chile: Central Bank keeps policy rate unchanged
April 17, 2014
At its 17 April meeting, the Central Bank decided to keep the policy rate at 4.00%. The decision was on par with market expectations. This is the first meeting in which the Bank decided to keep its policy rate unchanged following two consecutive meetings in which it was cut by 25 basis points each time. According to the Bank, local economic news confirm weakened vitality in the economy. This observation is in line with the scenario the Bank introduced in the previous monetary policy meeting in March. Regarding price developments, the Central Bank stated that headline CPI has increased, which reflects, “higher prices for foodstuff and fuels, together with the depreciation of the peso.” However, inflation expectations are still near the Bank's target range of 3.0% plus/minus 1.0 percentage points. 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