LatinNews Daily - 27 January 2022

In brief: Steep interest rate hike in Chile

* Chile’s central bank (BCCh) has raised interest rates to their highest level since 2008, increasing the benchmark interest rate by 150 basis points to 5.5% in response to mounting inflation. The rate hike, which was unanimously approved by the BCCh’s executive board, followed two other steep increases since October, when the interest rate stood at 1.5%. In a statement, the BCCh warned that “inflationary risks remain significant, and their possible materialisation becomes especially relevant in a context where both the annual change in the consumer price index and its outlook are already high.” Chile posted annual inflation of 7.2% in December, its highest level in 14 years and significantly above the BCCh’s target range of 2-4% for 2021.

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