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CHILE: Itaú Says BCCh Guidance Consistent With Two Further Cuts This Year

CHILE
  • Itaú says that BCCh’s communication following yesterday’s interest rate cut showed a clear dovish tilt. They interpret the guidance that under the central scenario the process of taking the policy rate towards neutral may unfold more swiftly than previously indicated, as meaning that the central bank will proceed with continuous cuts. The June IPoM had the centre of the 33% confidence interval for the policy rate averaging 5.5% in 4Q24 and 4.57% in 4Q25. With yesterday’s decision, the one-year ex-ante real rate reached 1.7%, from 1.95%.
  • Previously, Itaú had expected the policy rate to reach 5.5% at the end of this year, before further cuts to 4.5% in 2025, the upper bound of the neutral range. However, Itaú now believes that the updated guidance is consistent with two further cuts this year to 5.0%, with the policy rate then reaching neutral during the first half of next year.

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