Chile holds rate at 3% amid sluggish growth, inflation above target

By Susanna Moon

Chicago, Dec. 11 – Central Bank of Chile’s board again opted to hold the monetary policy interest rate steady at 3% at its monthly monetary policy meeting on Thursday.

The bank held the rate unchanged at 3% at its meeting in November and lowered the rate by 25 basis points to 3% in October, as previously reported.

The decision Thursday comes amid good economic news in the United States, against the backdrop of slower growth and low inflation in the eurozone and Japan, according to a press release from the bank.

The development has enlarged the expected differences in the monetary policy of those economies, the release noted.

“Output, demand and employment indicators continue to reveal the low dynamism of the Chilean economy,” the release said.

Annual inflation has fallen but remains above 5%, and core indicators are above 4%. Inflation is likely to stay above the upper part of the range for some months, the bank said.

The inflation target remains 3% over the policy horizon.

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