Money in Chile
Chile - Money
Central Bank hikes rates further in July
At its 13 July meeting, the board of the Central Bank of Chile (CBC) decided to increase the monetary policy rate from 9.00% to 9.75% taking total tightening this year to 575 basis points. The decision to hike by 75 basis points was voted unanimously and was above expectations; most market analysts predicted a 50 basis-point hike.
The Bank’s decision was chiefly driven by the desire to control surging inflation —which was 12.5% in June, well above the 3.0% target. The CBC commented that market inflation expectations had also risen. Moreover, international monetary tightening, fears of a world recession and domestic political uncertainty led the peso to depreciate by over 20% since the last meeting on 8 June, giving further motives for an interest rate hike.
The Bank’s forward guidance grew more hawkish, with the Board estimating that “new increases in the MPR will be necessary” and dropping language about these increases being “smaller in magnitude” relative to past hikes. Our analysts currently expect around 75 basis points of additional tightening by year-end.
Our panelists are taking the Bank’s latest move into account, with a new Consensus to be published on 9 August.
Chile - Money Data
|Money (annual variation in %)||10.6||10.1||4.7||9.4||8.2|
5 years of economic forecasts for more than 30 economic indicators.
Chile Money Chart
Source: Chile Central Bank and FocusEconomics calculations.
|Bond Yield||3.14||-0.44 %||Dec 30|
|Exchange Rate||752.0||0.05 %||Jan 01|
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August 1, 2022
Economic activity increased 3.7% in year-on-year terms in June, which was a deterioration from May's 6.4% increase.
July 31, 2022
Business confidence came in at 39.0 in July, down from June's 42.7.
July 18, 2022
Consumer confidence fell to 96.9 in June from May's 103.8.
July 14, 2022
At its 13 July meeting, the board of the Central Bank of Chile (CBC) decided to increase the monetary policy rate from 9.00% to 9.75% taking total tightening this year to 575 basis points.
July 8, 2022
Consumer prices increased 0.93% in June over the previous month, slowing down from the 1.20% rise logged in May.