Santiago de Chile, Oct 13 (EFE) .- The Central Bank of Chile decided this Wednesday to raise the reference interest rate by 1.25%, which will thus go from 1.5% to 2.75%, intensifying the withdrawal of the stimulus monetary risk in the face of inflationary risk, in which it is already the highest rise in this indicator in 20 years.
The issuer made the decision to raise the so-called monetary policy rate (MPR) unanimously by the members of its Board, when not a week has passed since the September Consumer Price Index (CPI) data was known, which rose to 1.2%, its highest record since 2008.
“The evolution of the macroeconomic scenario has increased the risks for inflation to converge to the 3% target,” the Bank explained in a statement.
“In September, the annual variation of the CPI increased to 5.3%, exceeding expectations (…) accounting for inflationary pressures on the demand and cost side, as well as the significant depreciation of the peso (.. .) In this context, inflation expectations have increased in all terms, “added the entity.
In this framework, the issuer’s Board decided to “advance the withdrawal of the monetary stimulus (…) bearing in mind the need to avoid a more persistent increase in inflation that leads it to deviate from the goal of 3% to two years term “, adds the document.
Chile is leaving the worst moments of the pandemic behind, with an economy that grew 19.1% per year in August and 1.1% per month seasonally adjusted.
Commerce continues to be the sector with the greatest dynamism, at the same time that several sectors that were lagging behind -especially services activities- returned to the levels of activity before the pandemic, as a result of which, together with the high demand, there was evidence of a reduction in sanitary restrictions.
In the labor market, employment has increased in the main categories, accompanied by a fall in inactivity and the unemployment rate, which stood at 8.5% in the June-August quarter, a decrease of 4.4 percentage points compared to the same period of the previous year and the lowest figure since March 2020.
The Chilean economy contracted by 5.8% in 2020 – the worst drop in four decades – and almost 2 million jobs were lost due to the pandemic, but the Central Bank estimates GDP growth for this year of between 10, 5% and 11.5%.
Disclaimer: This article is generated from the feed and not edited by our team.