Chile’s central bank is expected to start a monetary easing cycle later this week with a 75-basis-point rate decrease to 10.50%, as inflation continues to decline.
According to a poll of traders, Chile benchmark rate is expected to fall to 5.3% in the next 12 months, while traders expect this month’s inflation to be 0.3%.
Earlier, annual inflation in Chile reached its lowest level in a year and a half in June, which supports views that the central bank will soon begin to cut interest rates.
Chile’s 12-month inflation was 7.6% in June, down from 8.7% in the previous month and the lowest since December 2021, data from statistics agency INE showed.
Inflation in the world’s largest copper producer remains above the central bank’s target range of 2% to 4% but has slowed sharply from the three-decade highs reported in 2022.
The Chilean central bank acknowledged in June that it may start a monetary easing cycle in the short term if the positive trend in consumer prices continues, expecting inflation to approach its target level by late 2024.
