Chilean Peso Drops vs. Dollar even as Monetary Policy Remains Stable

The Chilean peso weakened today against the US dollar even though the central bank refrained from cutting interest rates yesterday. The currency advanced versus the euro.
The Central Bank of Chile kept its main interest rate at 5 percent. The central bank said in the statement that “international financial conditions show some improvement”. Regarding Chile’s fundamentals, the bank noted:

Domestically, first-quarter indicators show decelerating output and demand. The labor market is still tight.

Policy makers were talking about an intervention, but analysts did not expect the central bank to act this month. In fact, some economists believe that there will be no change to the monetary policy until the next year.
USD/CLP was up from 479.8000 to 481.1000 as of 18:55 GMT today. EUR/CLP declined from 617.9250 to 617.3750.

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