The Central Bank of Chile is widely anticipated to maintain its benchmark interest rate at 5.0% during its upcoming monetary policy meeting next week, according to a recent survey of market operators conducted by the bank. This expectation reflects a prevailing view that inflationary pressures, while still present, might be starting to moderate.
The survey also revealed that operators foresee the benchmark interest rate reaching 4.75% in 12 months. This projection suggests a potential easing of monetary policy in the medium term, contingent on inflation moving closer to the central bank’s target range.
Consumer prices are estimated to rise by 0.9% in January, bringing the annual inflation rate to 4.15% over the next 12 months. This figure remains above the Central Bank’s tolerance range, indicating that inflation continues to be a concern for policymakers. However, the projected slowdown in price increases could provide some room for the central bank to maintain its current policy stance.
Market participants also anticipate the Chilean peso to trade at 1,000 units per dollar in both seven and 28 days. This forecast suggests a relatively stable outlook for the currency in the short term. The stability of the peso is an important factor for the central bank, as it can influence inflation through import prices.
The central bank’s decision next week will be closely watched by investors and analysts for any indications of future policy direction. The balance between supporting economic growth and controlling inflation will likely be a key consideration in the bank’s deliberations.
