Chile: Central Bank keeps policy rate unchanged at 3.00%
March 19, 2015
The Central Bank of Chile decided to keep the policy rate at 3.00% at its meeting on 19 March. The decision was in line with market expectations. This is the fifth consecutive meeting in which the Bank has kept the policy rate unchanged following two meetings in which it cut its benchmark interest rate in an effort to support economic growth.
On the international front, the Bank commented that the economic recovery in developed countries is underway, especially in the United States. On the other hand, economic prospects for most countries in Latin America have deteriorated since the previous meeting. In addition, the Bank commented that the prices of commodities have dropped, although there are a few exceptions.
On the domestic front, output and demand indicators show that the economy is growing in line with the Bank’s projections. The unemployment rate increased, while nominal wages remain dynamic. In regard to price developments, the Bank said that inflation exceeded market’s expectations in February and acknowledged that, “in the most likely scenario, annual inflation is forecasted to remain above the tolerance range for some months, a development that will continue to be monitored with special attention.”
Author: Dirina Mançellari, Senior Economist