MercoPress. South Atlantic News Agency

Chilean central bank expected to hike the basic rate 25 points to 1%

Experts are now predicting that the basic interest rate will reach 1,50% in October, from the 1,25% original estimate

The Chilean central bank made public on Friday its latest Survey of Financial Operators, ahead of the Monetary Policy meeting scheduled to take place next Tuesday when most market analysts anticipate the bank will decide on a 25 points increase to its basic Monetary Policy rate from 0,75% to 1%.

Analysts also forecast that the upward trend will continue in the following meetings given the inflationary pressures experienced by Chile in recent months. In effect, the July Consumer Prices Index, CPI, marked a 0,8% increase, which was the highest since March 2016.

Compared to the previous survey, the experts are now predicting that the basic interest rate will reach 1,50% in October, from the 1,25% original estimate. Likewise, by the end of the year, the rate is forecasted to stand at 1,75% up from the 1,50% of the previous survey.

Regarding inflation, the August CPI is estimated at 0,35% and 0,6% in September, above original estimates, with the twelve-month index at 4%, or the highest central bank target range (2% to 4%).