MercoPress. South Atlantic News Agency

Chilean basic interest rate unchanged at 5.25%

The Chilean Central Bank Monetary Policy council decided this week to leave the basic interest rate unchanged at 5.25%.

In a short release the Central Bank points out that overseas conditions relevant to the Chilean economy "remain favourable", with a tendency which further contributes to growth in the different world economic regions.

"International financial conditions remain advantageous, the price of copper continues to be high and oil once again reaches record levels".

However, "activity expansion in the second quarter was less than expected, with available data indicating that the rhythm of growth contemplated for the second half of the year will be lower than expected".

The release says that employment and salaries continue to increase with "relative vigour" and "domestic financial conditions continue to be expansive".

However inflation remains in the upper side of the target mainly because of the fuel prices incidence, which means that the most likely scenario will be a continuation of the necessary interest rates paused adjustments to keep projected inflation in the range of 3% annually, according to the current horizon of monetary policy.

Finally the release indicates that the moment for the adjustments will much depend on the accumulation of data, but the available information reaffirms that they could be less frequent than in the last quarters.