Chile Rate Hike Expected

Chile’s central bank is expected to tighten rates today by 25bp to 3.50%. Bulltick says it expects the hike as “the CLP has been responsive to the government’s announcement and initiation of the $12bn currency intervention, inflation expectations are rising as economic growth remains robust and as the process of monetary normalization continues underway.” Credit Suisse thinks Chile will not pause its tightening cycle in the next several months. By year-end 2011, it expects the policy rate to rise to 5.0%.