MNI Chile CB Review - April 26: On Hold Amid High Uncertainty

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Executive Summary

• The Board of the Central Bank of Chile left the monetary policy interest rate unchanged at 4.50%, as expected, in a unanimous decision.
• The statement continued to strike a cautious tone, emphasising the heightened uncertainty, which the Board said requires it to maintain its meeting-by-meeting approach to monetary policy. Going forward, it remains in a data dependent mode and reiterates that it will be particularly watchful for any second-round effects or persistence of inflation from the oil shock.
• Many analysts expect the policy rate to be left on hold ahead, with the risk of rate hikes if the inflation outlook worsens further.