Chile hikes interest rate surprise 150 bps, biggest in 20 years
Reuters
Published Jan 26, 2022 05:02PM ET
By Anthony Esposito and Fabian Cambero
SANTIAGO (Reuters) - Chile's central bank enacted its largest interest rate hike in 20 years on Wednesday, lifting the benchmark rate by a larger than expected 150 basis points to 5.5% as it seeks to rein in stubbornly high inflation.
The central bank's board members voted unanimously for the move, according to a post-meeting statement.
"The evolution of inflation continues to face significant risks and their possible materialization becomes especially relevant in a context where both the annual change in the CPI and its outlook are already high", the central bank said.
Consumer prices in Chile jumped 7.2% in 2021, well above the central bank's target range of 2% to 4%.
The move, which topped forecasts for a hike to 5.25%, follows a rate increase in December to 4.0% from 2.75%, as the Andean country's economy rebounds strongly from the coronavirus pandemic and the government grapples with rising prices.
Central banks across the region have also been hiking rates to tame inflation. Brazil's central bank raised rates by 150 basis points in December and has signaled another such hike in February.
Mexico's central bank at its last meeting in December also stepped up its efforts to rein in surging inflation, raising its benchmark interest rate by 50 basis points to 5.5%.
(Graphic: Chile rate shock, https://graphics.reuters.com/CHILE-RATES/dwvkraelmpm/chart.png)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.