Chile’s Central Bank faces a difficult balancing act between cooling buoyant domestic demand, which suggests a need for tighter monetary policy, and taming a strong currency, which is already weighing on external competitiveness and which would appreciate further if interest rates were hiked. We suspect that concerns over the strength of the peso will dominate in the near-term and expect interest rates to remain at 5.0% until at least mid-year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services