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Capital Economics See BCCh Raising Rates To 11% By October.

CHILE
  • Capital Economics believe Chile’s peso is vulnerable to deterioration in investor risk appetite and should remain under pressure and, as a result, monetary policy will be kept tight for longer than most expect.
  • An improvement in Chile’s terms of trade is doubtful as energy prices will remain high and copper likely to trend lower.
    • Imports will fall on recession but exports will also struggle as global growth slows and amid a downturn in China’s property market.
    • Current account deficit will remain above 8% of GDP for all of 2022.
  • Central Bank to raise rates to 11% by October.
  • For reference the next BCCh meeting is scheduled for September 06.

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