Chile Modifies Reserve Requirements, Holds Rates

Chile’s central bank announced that it is temporarily modifying the reserve requirements for banks and savings and loan institutions. The change will allow the financial institutions to include yen, euros and local currency in their coffers. Until now, they were only allowed to keep dollar reserves. The central bank last week opted to leave the overnight lending rate unchanged at 8.25%, despite earlier expectations of more hikes to stave off inflation. “Given the uncertainty in the global market and its projected impact on inflation, the council believes that this decision is necessary to reevaluate the course of monetary policy,” the central bank said.