Chile’s Peso Goes Higher After Central Bank Maintains Key Interest Rate

The Chilean peso rose today before returning to the opening price after Chile’s central bank kept the main interest rate unchanged for the sixth time, but analysts speculate that the adverse economic conditions still may spur the bank to lower the rates.
Yesterday, the Central Bank of Chile decided that it’s prudent to keep the monetary policy interest rate at 5.25 percent. Economists predict that the central bank may yet lower the rate to 5 percent on the next meeting. The bank indeed mentioned enough reasons for a monetary easing in its statement. The statement said that “the uncertainty persists about the resolution of the situation in European economies” and concluded:

Over the course of the past few months, the external scenario has become more adverse than previously projected, which will likely have consequences over growth and inflation in Chile, as well as for the orientation of monetary policy.

USD/CLP trade near it opening level of 515.9500 today as of 13:00 GMT after dropping to 515.2500 earlier.

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