Banco Central de Chile Keeps Interest Rate at 5.25%

The Banco Central de Chile kept its monetary policy interest rate steady at 5.25%.  The Bank noted: "Domestically, output and demand show signs of moderation. In the case of output, the slowdown is more pronounced than was assumed in the Monetary Policy Report's baseline scenario; the opposite occurs with demand. Labor market conditions remain tight. CPI inflation rates have hovered around 3% y-o-y, while core inflation measures remain contained. Inflation expectations are close to the target. "

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

The Chilean economy grew 8.4% in the first half of 2011, driven by strong domestic demand; full year GDP growth is expected around 6.5%, while inflation is seen around 4% by the end of the year.  The Chilean Peso (CLP) has weakened about 9% against the US dollar so far this year, while the USDCLP exchange rate last traded around 499.

www.CentralBankNews.info