Chile’s central bank paused after raising interest rates for the first time in four years last month, while reiterating its forecast for further increases to come as it looks to tame inflation.
Policy makers, led by bank President Rodrigo Vergara, left the benchmark interest rate at 3.25 percent Thursday, as forecast by 20 of 28 economists surveyed by Bloomberg. The other eight expected a quarter-point increase.
A slowdown in inflation to the top of the target range in October will provide only a temporary respite for policy makers, Vergara said last week, forecasting that price-growth would accelerate again in the next few months. Inflation will remain above the 2 percent to 4 percent target goal through to the middle of next year, prompting one or two more rate increases over the next 10 months, he said.
“There should be another increase toward the end of the first quarter,” said Antonio Moncado, an economist at Banco de Credito e Inversiones in Santiago. The international and domestic “context of instability has led the central bank to be a little more cautious for now about rates.”