Chile Leaves Rate at 0.5%

Chile’s central bank has left the policy rate unchanged at 0.50%, as expected. Goldman notes that the bank opted to shorten after December 14 the maximum maturity of the complementary liquidity facility to 150 days from 180 days, and plans to continue to reduce maturity of the facility by 30 days per month in order to extinguish it in May. “This in our view signals that the first policy rate hike should come at the earliest late in 2Q2010, and possibly only during 2H2010,” says Goldman.