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More Hawkish Forecasts Within Survey Ahead of BCCh Decision

  • Risks that the Chilean central bank will go against their prior guidance of reducing the pace of rate hikes, have risen substantially. While 11 analysts within the Bloomberg survey are still predicting a 50 basis point move to 9.5%, another eight forecast a 75 basis-point hike, one sees the rate at 10% and another at 10.5%.
  • MNI Chile Central Bank Preview – July 2022: Forward Guidance Under Pressure
    • 2300BST/1800ET - Wednesday, July 13, 2022.
  • The BCCh used the June statement to signal further tightening in July, signalling that a rate hike would be of a smaller magnitude than the previous 75bps.
  • As such, the majority of surveyed analysts see a 50bp hike of the overnight rate target to 9.50% on Wednesday.
  • However, stubbornly high inflation combined with a steep deterioration of the Chilean peso has prompted calls for bolder action.

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