Chilean market points to key rate reaching its ceiling in October

The Chilean Central Bank could raise the Monetary Policy Rate (TPM) by some 50 basis points, taking it to 11.25%, at its meeting on Wednesday, October 12, and continue at that level for the next five months, when it would begin to fall, according to the Economic Expectations Survey (EEE) published this morning.

Analysts consulted by the issuing entity foresee that the adjustments in the reference interest rate will be attenuated as inflation begins to ease in Chile.

According to the survey, the monthly CPI would register an increase of 0.90% in October and 0.60% in November.

Inflation would close with an annual increase of 12.60% by December 2022 and stand at 5.40% by 2023, far from the Central Bank’s target range.

The EEE also indicates that the Gross Domestic Product (GDP) would grow by 2% at the end of this year but would suffer a 1% drop in 2023.

The estimate is in line with the International Monetary Fund (IMF), which yesterday released its projections and pointed out that Chile would be the only country in Latin America with a contraction in GDP.

The exchange rate is expected to average CLP 930 per dollar within two months but to average CLP 890 per US$1 within 11 months.

With information from Bloomberg