Chile to Continue Tightening Rate

Chile’s central bank is expected to continue hiking its rate today by 25bp to 3.25%. In November, it tightened the rate by 25bp, bringing it to 3.00%. “Though a pause cannot be entirely ruled out, with the prospects for growth quite positive, inflation gradually normalizing and the exchange rate relatively stable, the central bank should have room to continue its tightening cycle in 25bp increments,” says Morgan Stanley. Celfin agrees, and had forecast that the rate would reach 3.25% by the end of 2010.