Chile Keeps Rates on Hold

Chile’s central bank kept its rate unchanged at 3.25%, surprising the market, which widely expected a 25bp hike. The bank says that demand and employment continue evolving positively, in line with projections. Celfin, one of the banks that had predicted a pause, says inflation pressures are not yet present in the economy and that a pause supports the effectiveness of the recent currency intervention by the central bank. JPMorgan expects Chile to hike at the next meeting and retains its expectation of continued monetary tightening toward neutrality through year-end amid strong economic activity and accelerating inflation. Credit Suisse, which was expecting a hike, sees the rate hitting 5.00% by year-end.