Rates Rise, But Inflation Here To Stay

August 2008 | Economic Analysis

Chile's central bank continues to tighten monetary conditions in an effort to address headline and core inflation. While this is a welcome development, we note that ongoing foreign currency interventions by the Banco Central de Chile may render disinflationary measures in place unsuccessful. While we expect the bank's intervention schedule to be abandoned in the near future, we have revised up Chile's end-2008 inflation forecast to 8.5% y-o-y, from 6.4%.

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