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Markets Reopen Following Holiday, CLP To Strengthen Post-BCCh

CHILE
  • The Board of the Central Bank of Chile surprised markets last Thursday by unanimously deciding to cut the monetary policy interest rate by a smaller-than-expected 50bps to 9.00%. Furthermore, in an effort to contain the weakening peso, the central bank also announced it would suspend the reserves accumulation program as well as the gradual reduction of its NDF position.
  • Importantly, the BCCh also removed the forward guidance which leads us to believe that there will likely be a re-assessment of the policy rate corridor in the December Monetary Policy Report (IPoM). Local markets were closed on Friday in observance of a public holiday and therefore today’s open will reflect the latest developments and USDCLP should come under immediate pressure. Key support for the pair is at the 50-day EMA – which has moved up to 900.28.
  • Click to view the full review of last week’s decision: https://roar-assets-auto.rbl.ms/files/56544/MNI%20BCCh%20Review%20-%20October%202023.pdf

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