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BCCh Discussed Both 75 and 100BP Rate Cuts At April Meeting

CHILE
  • BCCh Minutes here: https://www.bcentral.cl/documents/33528/5671800/Minute-MPM-april-2024.pdf/c457e41d-7eee-a0b8-7b1d-27eda63060d3?version=2.0&t=1713315493254
  • “There was consensus in the Board that the options of reducing the MPR by 75 or 100bp seemed the most appropriate”. The board said that “leaning to one of the other option had connotations more closely related to tactical and risk elements”.
  • The 75bp option “provided greater degrees of freedom in the event that some assumptions in the central scenario failed to materialize as expected, particularly those that considered that some of the recent phenomena, such as the rise in cost pressures, were temporary in nature”.
  • The board also highlighted they wanted to avoid surprising the market, which could impact the correct transmission of the board’s assessment of macroeconomic conditions and the expected path of inflation.

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