Central Banks
Chile Holds Interest Rate at 5% in First Easing Pause Since July
- Rate hold expected by all economists in a Bloomberg survey
- Weaker peso, electricity price rise clouding inflation outlook
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Chile’s central bank paused its cycle of interest rate cuts and left all options on the table for future borrowing cost adjustments, citing heightened uncertainty as well as domestic and global inflation risks.
Policymakers led by Rosanna Costa voted unanimously to keep borrowing costs at 5% late on Tuesday, as expected by all analysts in a Bloomberg survey. In an accompanying statement, board members wrote that a weaker peso, higher labor costs and an increase in electricity tariffs are driving inflation dynamics.