UPDATE 1-Chile sharply hikes interest rate as inflation heats up

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SANTIAGO, Oct 13 (Businesshala) – Chile’s central bank on Wednesday raised the country’s benchmark interest rate to 2.75% from 1.5%, as the Andean country’s economy recovers strongly from the coronavirus pandemic and the government grapples with high inflation. Is.

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The move, which far exceeded estimates by traders and analysts, follows a hike by the bank in late August. Regional neighbors including Peru and Brazil have also raised their benchmark rates this year to help offset rising prices.

The bank said the board had unanimously agreed to the rate hike, which was well above expectations of a new rate of 2.25 per cent from traders and analysts.

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Chile’s central bank has gradually tightened purse strings since July, when it raised the policy rate by 25 basis points after keeping the policy rate at a technical low of 0.5% for more than a year.

“The development of the macroeconomic scenario has raised the risk for inflation convergence within the policy horizon to the 3% target,” the central bank said in a statement. (Reporting by Fabian Campero; Writing by Hugh Bronstein; Editing by Rosalba O’Brien)

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