Money in Chile

Chile Money | Economic News & Forecasts

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

2015   2016   2017   2018   2019  
Money (annual variation in %)10.6  10.1  4.7  9.4  8.2  

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Chile Money Chart


Chile Money
Note: Annual variation of M2 in %.
Source: Chile Central Bank and FocusEconomics calculations.

Chile Facts

Value Change Date
Bond Yield3.14-0.44 %Dec 30
Exchange Rate752.00.05 %Jan 01

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