By www.CentralBankNews.info Chile’s central bank held its monetary policy interest rate steady at 5.0 percent, as expected, and said inflationary expectations remain in line with its target and recent indicators for domestic output and demand have exceeded forecasts.
The Central Bank of Chile, which last trimmed rates by 25 basis points in January 2012, repeated that any changes in its policy stance would depend on the implications of domestic and external conditions on the inflationary outlook and it’s policy was aimed at keeping inflation at 3.0 percent.
Chile’s inflation rate inched up to 1.6 percent in January from 1.5 percent in December, the lowest rate since mid-2010. The central bank targets inflation of 2-4 percent, with a 3.0 percent midpoint.
The central bank said international financial conditions were stable but the fiscal and financial situation in the euro zone remains fragile. Weak growth continues in developed economies while “more favorable signs are observed coming from China” and world prices of copper have risen.
The central bank’s latest poll of analysts earlier this week showed that interest rates were expected to remain on hold today but then rise by 25 basis points within 11 months.
Chile’s Gross Domestic Product expanded by 1.4 percent in the third quarter from the second for annual growth of 5.7 percent, up from 5.5 percent in the second quarter.