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Central Bank Commence Lift-Off With 25bps Hike to 0.75%

CHILE
  • Expected by the majority of analysts, the BCCh began their gradual tightening cycle, in a unanimous decision.
  • The committee estimates that the "aggregate background information is similar to the economic trajectory foreseen in the base scenario of the June Monetary Policy Report".
  • The activity gap is expected to close rapidly, complemented by a high fiscal impulse and strong dynamic consumption which create the conditions for a gradual withdrawal of monetary stimulus.
  • Regarding inflation, the MPC do not appear alarmed, referencing that core CPI excl volatiles remains below the headline, remaining slightly above 3% annually.
  • The committee continue to anticipate that the monetary policy rate is to remain below its neutral value throughout the two-year policy horizon.
  • Link to full statement: https://www.bcentral.cl/en/content/-/details/monetary-policy-meeting-july-2021
  • The minutes of this meeting will be published on Friday, 30 July 2021. The next Monetary Policy Meeting will be held on Tuesday, 31 August 2021.

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