Chile Leaves Interest Rate Unchanged At 2.50%


Chile’s central bank kept the benchmark interest rate unchanged at 2.50 percent in its August 17th, 2017 meeting following no change in its July and June meetings. The outcome matched consensus expectations, and leaves the interest rate standing at its lowest level since September of 2010. Policymakers underscored that economic conditions improved since the last meeting, with the peso appreciating the copper prices heading north. Members of the board did not adopt an explicit bias on this occasion. Chile's consumer prices increased 1.7 percent year-on-year in July of 2017, the same pace as in the previous month.

Statement by the Central Bank of Chile:

Incoming international news continue to point to a favorable scenario. The world activity outlook has strengthened and global financial conditions remain expansionary.  In general, commodity prices have increased, most notably in the case of copper.

On the domestic front, July’s inflation was 0.2%, thus in annual terms it remained at 1.7%, below the last Monetary Policy Report’s estimate. Inflation expectations brought no relevant news. During the second quarter activity posted weak growth, attributable to the performance of some investment-related sectors and some specific factors. Private consumption remains stable, in line with conditions in the labor market and expectations that have become less pessimistic. The peso has appreciated.

The Board reiterates its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the policy horizon. Any future changes in the monetary policy rate will depend on the implications of domestic and external macroeconomic conditions on the inflationary outlook.

Mario | mario@tradingeconomics.com
8/17/2017 9:32:25 PM