Chilean Traders See Faster Inflation as Peso Loses Steam

Chilean inflation will accelerate this month as the peso depreciates against the U.S. dollar, according to traders and investors polled by the central bank.

Consumer prices will rise 0.3 percent in February after climbing 0.2 percent in January and remaining unchanged in the last month of 2012, according to the bi-weekly survey of traders and investors posted on the bank website today. Traders in the previous survey forecast 0.2 percent inflation this month.

Policy makers since the last survey was published on Feb. 13 kept borrowing costs unchanged at 5 percent for a 13th consecutive month, saying in a statement accompanying their decision that domestic demand had exceeded forecasts and the labor market was tight. The key interest rate will remain unchanged for six months before rising to 5.25 percent by March next year, according to today’s poll.

Economic growth as measured by the Imacec index, a proxy for gross domestic product, grew 5.6 percent in 2012 from the previous year, according to central bank data. Unemployment fell to 6.1 percent in the three months through December, down from 6.6 percent in the year-ago period.

Manufacturing output grew 2.4 percent in 2012 as retail sales surged 8.8 percent, according to government data. GDP gains will slow this year, expanding 4.6 percent over 2012, according to analysts polled by Bloomberg.

Annual inflation will speed up to 3 percent in 12 months after accelerating to 1.6 percent in January from 1.5 percent in December, according to today’s survey of 56 traders and investors. Policy makers target 3 percent inflation, plus or minus one percentage point over two years.

The peso was largely unchanged at 473.63 per U.S. dollar at 8:42 a.m. Santiago time today. Chile’s currency will weaken to 474 in seven days and 478 in three months, according to today’s survey.

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