The Central Bank of Chile raised its benchmark interest rate by 0.75 percentage point, from 9.00% to 9.75% per annum, the institution said. It’s the highest level in 24 years.
The decision was unanimous among Council members, who noted that, for inflation to fall to the 3% target within two years, further adjustments to basic interest rates will be necessary.
In the last decision, an increase of 75 basis points had already been made.
In a statement, the Chilean central bank highlights that global inflation has continued to rise and central banks have continued to raise benchmark rates, or signal a faster rise.
“The Federal Reserve (Fed, US central bank) stands out, surprising with a higher than expected increase and announced that the increases will continue until inflation is controlled”, says the document.
“Financial conditions became tighter for both developed and emerging economies, with emphasis on the declines in stock markets and a global appreciation of the dollar”, assesses the authority.
“Expectations for world growth have deteriorated. In turn, commodity prices fell more than expected, largely due to fears of a global recession. Of particular note is the fall in food prices, where some favorable news on the supply side was also added”, says the central bank.
The Board of Directors assured that it will keep an eye on the evolution of inflation and its determinants. The next meeting is scheduled for September 6th.
Source: CNN Brasil
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