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Chile Monetary Policy May 2019

Chile: Central Bank stays put in May

At its 9 May monetary policy meeting, the Board of the Central Bank of Chile (BCCh) voted unanimously to leave the key policy rate unchanged at 3.00%, amid weaker-than-expected inflation. The decision was in line with analysts’ expectations.

In its communiqué, the Board remarked that inflation remained at the floor of the Bank’s 3.0% plus or minus 1.0 percentage point tolerance band in April. The rate was thus left at 3.0% for a longer period of time in an effort to push inflation towards target by the end of 2020.

Looking ahead, the Board did not reiterate its commitment to further monetary tightening in order to reach a neutral key rate in the medium-term. Instead, it will reassess its normalization trajectory during its next meeting, to account for the deceleration in domestic activity and the dovish turn taken by the central banks of major economies.

The next monetary policy meeting is scheduled for 7 June.

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