07/28/2023 – 7:48 pm
The Central Bank of Chile unanimously decided this Friday, the 28th, to cut its basic interest rate by 100 basis points (bp), to 10.25% per annum. The drop was stronger than most analysts had forecast, who had expected a 75 basis point decline. With the decision, the Chilean Central Bank is one of the first to initiate the monetary easing movement in Latin America.
According to an official statement, the country’s inflation continues to slow down, with surprises on the downside of the rate in a broad group of economies, including the United States. The cut was bigger than expected and signals the first change in rates this year.
“However, research continues to point to the need for a tight monetary policy in developed economies. The main central banks raised the reference rates again and signaled that their monetary policies will remain in restrictive territory for a long time”, points out the central bank.
The country’s Central Bank also points out that the external impulse that the Chilean economy will receive should remain “limited”, “with weak prospects for global growth in this and next year”. However, the monetary authority points out that, in general, local activity continues to evolve as expected.
The central bank expects to cut rates again ahead of time. “In any case, the magnitude and timing of the reduction process will take into account the evolution of the macroeconomic scenario and its implications for the inflation trajectory”, he emphasizes.
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