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MNI BCCh Review – Oct 2023: Smaller Rate Cut and Steps to Contain CLP Weakness

MNI Chile Central Bank Review - Oct 2023

MNI Chile Central Bank Review - Oct 2023

Executive Summary

  • The Board of the Central Bank of Chile surprised markets 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 has 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).
  • It is worth noting that Chile’s markets are closed Friday in observance of a public holiday.

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MNI BCCh Review - October 2023.pdf

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