Chile’s central bank keeps monetary policy rate unchanged at 3%

By Angela McDaniels

Tacoma, Wash., Aug. 14 – The board of the Central Bank of Chile decided to keep the monetary policy interest rate at 3% at its monthly monetary policy meeting, according to a press release from the bank.

In Chile, annual CPI variation is still above 4% and is expected to stay around that level for longer than previously thought, the board said.

Meanwhile, output and demand continue to be weaker than assumed in the Monetary Policy Report’s baseline scenario, and private growth expectations for this and next year dropped further.

The board said confidence indicators have turned more pessimistic, private job creation and annual wage growth show no material change from last month and the Chilean peso has depreciated.

Internationally, financial markets remain highly volatile, emerging country currencies have depreciated further, and risk premiums have increased, the board noted.

The board reiterated its commitment to conduct monetary policy with flexibility so that projected inflation stands at 3% over the policy horizon.

The rate was last lowered in October 2014. It was decreased by 25 basis points.

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