Chile Leaves Rate At Low

As expected, Chile’s central bank left the monetary policy rate unchanged at 0.5%. The bank says that “given the current circumstances, marked by the uncertainty associated with the effects of the earthquake, maintaining the policy rate at its minimum 0.5% level until at least the 2Q2010 is coherent with projected inflation at 3.0% over the relevant horizon for monetary policy.” Goldman Sachs says that rather than initiating the rate normalization cycle sometime during Q2, it now expects the central bank to delay the first move to no earlier than Q3, with the policy rate likely reaching year-end 2010 at no more than 2%. Bulltick, which also expected no changes to the policy rate, believes there will be no hikes “until earliest the last quarter of this year if at all.”