Chile central bank cuts rate by 50 basis points to 6.0%
Adds context on recent cuts in paragraph 2, details on statement language in paragraphs 7-8, next meeting in paragraph 9
SANTIAGO, May 23 (Reuters) -Chile's central bank cut its benchmark interest rate by 50basis points to 6.00%on Thursday in a unanimous decision, saying that it foresees further cuts to the rate but promising to be flexible.
The decision, in line with forecasts in a traders' poll last week, reflects an easing in the size of rate cuts after a 75-basis point cut in April and a 100-basis point cut in January.
After peaking in 2022, annual inflation in the world's largest copper producer fell to 3.9% at the end of 2023, but sped back up again before landing at 4.0% in April .
In a statement, the bank said it foresees further rate cuts, with the size and timing of those moves taking into account the "evolution of the macroeconomic scenario and its implications for the trajectory of inflation."
The central bank has been cutting interest rates since last year, reducing its benchmark rate by a total 525 basis points so far as of Thursday.
Chile's central bank targets inflation at 3%, plus or minus one percentage point, and the bank's board on Thursday added that inflation expectations are aligned with the target.
"The board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon," Thursday's statement said, language that was absent in April's statement.
Thursday's statement, meanwhile, removed language used previously about "the need to continue closely monitoring" inflation's evolution.
The central bank's governing board will make and announce its next interest rate decision on June 18.
Reporting by Fabian Cambero and Kylie Madry; Writing by Brendan O'Boyle; editing by Diane Craft
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
