Chile Holds Rates At 5.25%

As expected, Chile’s Central Bank has elected to hold the benchmark overnight lending rate at 5.25%, its highest level in four years. Recent figures showing that growth in the first half of the year had slowed and that inflation was within the target range have prompted the Bank’s decision. Chile posted first-half growth of 4.8%, the slowest pace since 2003, and analysts cut growth forecasts for the year back from almost 6% to nearer 5%. Meanwhile, inflation for the 12 months through July rose to 3.8%, near the top end of the 2%-4% target range set by the government. Last month the Bank raised the rate for the first time since April, lifting it by 25 basis points to its current level.