Chilean Peso Suffers from Policy Outlook

The Chilean peso declined against the US dollar today after the nation’s central bank revised its growth outlook down and expressed a dovish monetary policy outlook.

The Central Bank of Chile released its Monetary Policy Report for December today. In it, the central bank predicted that Chile’s gross domestic product will rise 1.5%-2.5% in 2017, down from 1.75%-2.75% in the previous forecast. As for monetary policy outlook, the central bank said that its expectations are in line with market forecasts, which point at two 25-basis-point interest rate cuts over the next two years, and stated:

With that, we assure that monetary policy will continue to be expansive throughout the policy horizon.

USD/CLP rose 0.48% to 676.81 as of 18:07 GMT today.

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