CHILE: Santander Sees Single BCCh Rate Cut In H2
Mar-20 16:47
- Santander expects the BCCh to remain on hold at 5.00% tomorrow. The uncertainty and volatility in the external environment reinforce a scenario in which the central bank is expected to maintain a cautious stance, with a single rate cut in the second half of the year, closing at 4.75%.
- Inflation has evolved in line with expectations. However, pressures have eased, and expectations have improved. Inflation is expected to close the year at 3.7%, with rapid convergence to the 3% target in H1 2026.
- The Chilean economy grew 2.6% in 2024, with strong momentum from the external sector and signs of domestic demand recovery in Q4. This year, Santander expects a similar growth rate, but driven primarily by a stronger recovery in domestic demand.
- Investment is seen improving, particularly in the mining and energy sectors, while private consumption should continue to recover amid lower interest rates and a more dynamic labour market.
- The Chilean peso has appreciated beyond its fundamentals. Santander sees it depreciating towards year-end, reaching 950 vs. the dollar, partly due to an expected correction in the copper price.
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OPTIONS: Larger FX Option Pipeline
Feb-18 16:36
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- USD/JPY: Feb20 Y154.00($3.0bln)
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- USD/CNY: Feb20 Cny7.2000($1.9bln), Cny7.2500($1.9bln), Cny7.3700($1.3bln)
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