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MNI Chile Central Bank Review - Sep 2023: More Moderate 75BP Cut

MNI Chile Central Bank Review - Sep 2023

MNI Chile Central Bank Review - Sep 2023

Executive Summary

  • The Board of the Central Bank of Chile decided to cut the monetary policy interest rate by 75bps to 9.50%.
  • The decision is considered marginally hawkish to expectations with surveyed analysts split between expecting this action or a more dovish 100bp reduction. In line with the prior meeting, the decision was adopted unanimously.
  • The statement highlighted that the “macroeconomic scenario has evolved in line with what was anticipated, with inflation projected to converge to the 3% target in the second part of 2024.”
  • The board still believe that if the projections of the central scenario of the September monetary policy report (IPoM) materialize, in the short term the key benchmark rate will continue the outlined trajectory which forecast the year-end rate between 7.75-8.00%. Analysts appear unanimous in expecting back-to-back 75bp rate cuts for the remainder of 2023.
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