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Chilean central bank edging closer to FX intervention

Chile’s central bank (BCC) stopped short of announcing measures to weaken the peso at last night’s policy meeting, but its accompanying statement revealed mounting concerns about the strength of the currency. Even if the BCC does resume dollar purchases on the spot market, we don’t subscribe to the view that this will be a precursor to rate hikes and expect rates to remain at 5.0% for at least six months.

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