The Board of the institution made this decision because the local economy is adjusting slower than expected and inflation is taking time to reduce
At its Monetary Policy Meeting, the Board of the Central Bank of Chile unanimously agreed to maintain the local monetary policy interest rate at 11.25%.
In a statement, the local bank assured that the data from the end of 2022 and the beginning of 2022 show that the adjustment process of the economy has been slower than expected.
“Discounting the seasonality, the non-mining Imacec for February had an increase of 0.1%, with increases in the activity of commerce and industry. In turn, in the fourth quarter, household consumption fell 0.7% compared to the previous quarter —seasonally adjusted series—, reducing its adjustment speed with respect to the immediately preceding quarters. The labor market reports an increase in employment and participation, with unemployment rising to 8.4% nationwide. The perception of households and companies continues at pessimistic levels, although it has improved compared to previous months, ”says the institution.
Local inflation, on the other hand, is taking a long time to come down, according to the Central Bank, who assures that in February total inflation was 11.9%, while core inflation was 10.7% annually.
“The economy is adjusting slower than anticipated and inflation is taking longer to come down. In this context, the Board considers that it will be necessary to maintain the TPM at 11.25% until the state of the macroeconomy indicates that the inflation convergence process to the 3% target has been consolidated”, he points out.
The World Bank recently adjusted upwards its forecasts regarding the performance of the Chilean economy this year, which will fall by 0.7%, compared to the 0.9% estimated in its previous projection.