Chile keeps policy rate at 3½%, aims to keep projected inflation at 3%

By Wendy Van Sickle

Columbus, Ohio, April 13 – The board of the Central Bank of Chile decided during its April meeting to maintain the monetary policy interest rate at 3½%, according to a bank notice.

The board said international financial markets have been relatively calm recently, showing mixed movements during the last month, but that risks remain. Long-term interest rates of developed economies remain low, forecasts for world growth do not show relevant changes and commodity prices have had mixed movements.

On the domestic front, March CPI inflation was lower than expected and its annual change was 4½%, the board said. CPI inflation is expected to remain over 4% for some months. Inflation expectations two years out remain at 3%. These variables will continue to be monitored with special attention.

Confidence indicators are still “in pessimistic territory,” and the annual growth rate of salaried employment and the unemployment rate showed no major changes, while the pace of annual wage growth decreased.

The board said it remains committed to conducting monetary policy with flexibility, so that projected inflation stands at 3% over the policy horizon.

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