Dec. 21 (Bloomberg) -- Chile’s central bank will lower its benchmark interest rate to 5 percent in January, according to a bi-weekly survey of traders and investors published today on the bank’s website.
Policy makers have kept the rate at 5.25 percent since July after raising borrowing costs five times in the first half of this year. They will lower the rate to 4.5 percent in April and 4.25 percent in July, according to the median forecast of 58 traders and investors in the survey taken yesterday.
The central bank yesterday lowered its growth and inflation forecasts for 2012 and said that interest rates would probably fall. Policy makers will move the benchmark rate broadly in line with estimates in market surveys under the bank’s “base” scenario, President Rodrigo Vergara said. That outlook envisions a limited impact at home from global financial turmoil, he told Senators in Valparaiso.
“We once again confront a scene of external turbulence,” Vergara said after publishing the bank’s quarterly monetary policy report yesterday. “It’s important to continue developing and adapting our policy instrument to changes in the financial landscape.”
Inflation in the next 12 months will be 2.7 percent, today’s survey showed. The Chilean peso will slide to 520 per U.S. dollar in seven days’ time, according to the survey.
Policy makers forecast inflation of 3.9 percent in December and 2.7 percent at the end of next year, according to yesterday’s central bank report. The bank targets 3 percent inflation, plus or minus 1 percentage point.
To contact the editor responsible for this story: Philip Sanders at firstname.lastname@example.org.