LatinNews Daily - 30 March 2022

In brief: Chile raises interest rates again

* Chile’s central bank (BCCh) has raised the country’s benchmark interest rate from 5.5% to 7.0% in response to mounting inflation. The rate hike followed three other steep increases since October 2021, when the interest rate stood at 1.5%. In a statement, the BCCh highlighted that annual inflation rose to 7.8% in February, almost one percentage point higher than it anticipated in its December monetary policy report – a difference that was largely due to increased core inflation, especially in goods. 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. The bank said in a statement that “Future increases in the MPR (monetary policy rate) could be less than those made in recent quarters,” but that this “will depend on the evolution of the macroeconomic scenario.”

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