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Goldman Sachs See Increased Likelihood Of July BCCh Cut

CHILE
  • While Goldman Sachs expect the BCCh board to keep rates unchanged in June, in their view recent data is likely to prompt the central bank to provide more dovish guidance in the June IPoM and increase the likelihood of a cut in July.
  • Headline inflation has surprised downwards in the last four months. In addition, weaker-than-expected activity data in April and the faster pace of private consumption adjustment in Q1 should provide the central bank with some comfort that the non-mining output gap has continued to narrow.
  • However, core inflationary pressures remain more persistent, which should keep the central bank conservative and the policy rate restrictive for some time.

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