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Santander Believe It’s Premature To Expect Change In BCCh Strategy

CHILE
  • Santander believe the market will continue to observe increases in inflation both due to higher external prices and due to the impact of the exchange rate, although a deepening of the recent exchange rate appreciation could lead to pressures on future prices being somewhat more limited than initially expected.
  • The downward surprise in inflation for March could give some sign that the impacts that raised the figures at the beginning of the year are of a rather transitory nature, but it is premature to anticipate a change in the monetary policy strategy.
  • However, if the April CPI surprises downwards again - particularly in items that are anticipated to have greater price pressures such as services and non-volatile goods - and if activity continues to present gaps, it is possible that at the May meeting, a rate cut greater than what is implicit in the market will be considered again, approaching magnitudes similar to the recent adjustment (-75 bp).

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  • Santander believe the market will continue to observe increases in inflation both due to higher external prices and due to the impact of the exchange rate, although a deepening of the recent exchange rate appreciation could lead to pressures on future prices being somewhat more limited than initially expected.
  • The downward surprise in inflation for March could give some sign that the impacts that raised the figures at the beginning of the year are of a rather transitory nature, but it is premature to anticipate a change in the monetary policy strategy.
  • However, if the April CPI surprises downwards again - particularly in items that are anticipated to have greater price pressures such as services and non-volatile goods - and if activity continues to present gaps, it is possible that at the May meeting, a rate cut greater than what is implicit in the market will be considered again, approaching magnitudes similar to the recent adjustment (-75 bp).