Chile: Central Bank keeps rates on hold for the 18th month in a row
July 11, 2013
At its 11 July meeting, the Central Bank left the policy rate unchanged at 5.00%, a decision that was expected by the market. The last policy change took place in January 2012, with a cut of 25 basis points.
In its statement, the Bank kept its global outlook unchanged from last month, noting that international financial conditions have tightened, in particular with regards to emerging economies, as the market fears a tapering of the quantitative easing program by the United States. The Central Bank acknowledged that the Eurozone remains in recession, growth prospects for China have deteriorated but a recovery is expected in the U.S.
On the domestic front, monetary authorities stated that the economy continues to show decelerating output and demand, in particular in investment. Regarding price developments, the Bank stated that prices for food and metals dropped in recent weeks while fuel prices increased. On the inflation outlook, the board sees headline and core inflation remaining in line with its 3.0% target in the policy horizon. The next policy meeting is scheduled for 13 August.
LatinFocus Consensus Forecast panellists see the policy rate at 5.01% by the end of the year. Next year, panellists expect the policy rate to end the year at 5.06%.