Friday, February 17, 2012

Central Bank of Chile Holds Rate at 5.00%

The Banco Central de Chile held its monetary policy interest rate unchanged at 5.00%.  The Bank noted: "Domestically, economic activity and domestic demand have tended to outperform forecasts from the latest Monetary Policy Report. The labor market is still tight. Credit market conditions are stable. Y‐o‐y CPI inflation is slightly above the tolerance range, while core inflation measures have normalized.  Inflation expectations remain around the target."

Chile's central bank previously cut the monetary policy interest rate by 25 basis points to 5.00% at its January meeting.  The Bank last raised its monetary policy interest rate by 25 basis points to 5.25% at its June meeting last year.  Chile reported annual consumer price inflation of 4.2% in January this year, compared to 3.7% in October, 3.3% in September, 3.2% in August, 2.9% in July, 3.4% in June, 3.3% in May and 3.2% in April last year; within the Bank's inflation target of 2-4%.  

The Chilean economy grew 0.6% in the September quarter (1.4% in Q2, 1.6% in Q1), placing annual GDP growth at 4.8% (6.6% in Q2, 9.9% in Q1).  The Chilean Peso (CLP) has weakened about 3% against the US dollar over the past year, while the USDCLP exchange rate last traded around 484.

1 comment:

  1. I've experienced an interest rate of around 15 % in the 80's somewhere, but I didn't notice the inflation at the time. Perhaps it's like that somewhere today?