Money in Chile
Chile - Money
Central Bank implements a further aggressive rate hike in October
At its 13 October meeting, the board of the Central Bank of Chile decided to hike the monetary policy rate by 125 basis points to 2.75%, a larger increase than markets were anticipating. Rates have now risen by 225 basis points so far this year.
A desire to rein in surging inflation was chiefly behind the Bank’s move. Inflation rose to a multi-year high in September, spurred by high international commodity prices and strong domestic demand, and is currently way above the Bank’s 3.0% target. Inflation expectations also rose as a result. Moreover, a potential fourth withdrawal from the country’s pension funds has the potential to further stoke price pressures. The decision to hike could have also had one eye on stabilizing the peso, which has tumbled in recent months amid intensifying political uncertainty.
The Central Bank sounded an even more hawkish tone than at its prior meeting, noting that the “policy rate will reach its neutral level sooner than foreseen in the September Report’s central scenario”. In September, the Bank had estimated a return to neutral territory (in the 3.25%–3.75% range) by the end of Q1 2022. As such, rates are set to continue increasing rapidly going forward, with more tightening likely at the next meeting on 14 December.
FocusEconomics Consensus Forecast panelists are still assessing the Bank’s latest move, with a new Consensus Forecast to be published on 9 November.
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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October 13, 2021
At its 13 October meeting, the board of the Central Bank of Chile decided to hike the monetary policy rate by 125 basis points to 2.75%, a larger increase than markets were anticipating.
October 11, 2021
Consumer confidence came in at 92.3 in September, up notably from August's 81.6.
October 8, 2021
Consumer prices rose 1.18% in September over the previous month, picking up from August's 0.36% rise.
October 4, 2021
Business confidence rose to 60.7 in September from August's 60.4.
October 4, 2021
The consumer confidence index, produced by the Universidad del Desarrollo, dropped to 81.6 points in August from 87.5 points in July, which had marked the strongest result since September 2019.