Ex-Central Banker Sees Chile Rate 5.75% in 18 Months

Chile’s benchmark interest rate probably will return to at least neutral levels of about 5.75 percent in 18 months, Vittorio Corbo, a former central bank president, said today in a speech.

Central bank policy makers increased the rate by 50 basis points to 1.5 percent in July, saying in a statement accompanying their decision they would continue to increase borrowing costs. The central bank in July 2009 reduced the benchmark rate to a record low 0.5 percent to help pull the economy out of its deepest slump in a decade.