The Monetary Council of the Chilean central bank surprised markets on Monday by deciding to increase the basic interest rate 75 base points to 1,5%, the highest jump since August 2001. According to a bank release, the decision from the council was unanimous, and well beyond market expectations that had estimated an increase of 25 to 50 base points.
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%.
Chilean Central Bank board members decided unanimously to increase the reference inter-bank interest rate some 25 base points to 0.75%, which represents the first rise in over two and a half years, given the improved economic prospects since the pandemic was triggered.
In a move to curb growing inflation, Brazil's Central Bank Wednesday decided to raise the basic interest rate by 0.75 percentage points, to 3.5% per year. It was the second time in a row that the monetary authorities responded to this type of measure.
The US dollar kept its downward trend against the Uruguayan peso Friday, closing at US $ 1 = UR $ 43.8 for interbank operations, it was reported. In Brazil, the exchange rate fell 0.7% Friday and stood at 5.44 R$ per dollar.
Brazil's central bank on Wednesday announced a first interest rate hike since 2015, a surprising 75 basis point increase to 2.75% and anticipated a similar increase in May to fight inflation even as the economy struggles during the pandemic.
The Federal Reserve on Wednesday sharply ramped up its expectations for economic growth but indicated that there are no interest rate hikes likely through 2023 despite an improving outlook and a turn this year to higher inflation.
Brazil’s central bank kept its key interest rate at a record low 2.00% on Wednesday, as expected, but gave the first sign it could soon drop its pledge to keep rates lower for longer as inflation expectations converge toward target.
Colombia became the latest emerging market to end a series of interest rate cuts, joining peers from Brazil to South Africa as it recovers from the pandemic. After the decision, the central bank said that Governor Juan Jose Echavarria will retire early next year.
Brazil’s central bank kept its key interest rate at a record-low 2.00% on Wednesday, maintaining its “forward guidance” pledge to keep rates lower for longer and even the possibility of further easing, despite the recent rise in inflation and fiscal risks.