Chile Central Bank decides largest interest rate hike in 20 years due to inflationary pressures

The rate increase from 1.5% to 2.75%, the largest since 2001, follows a 1.2% increase in the consumer price index (CPI) in September, the highest monthly figure in 13 years, generating a cumulative inflation of 4.4% so far this year and 5.3% in twelve months.

RIO DE JANEIRO, BRAZIL - On Wednesday (13), the Central Bank of Chile announced an increase in its benchmark interest rate to 2.75% per annum, the most significant increase in 20 years, in the context of inflationary pressures.

Amid a "marked and systematic" deterioration of the financial markets, the monetary authority raised the interest rate 125 basis points from 1.50% to 2.75%, in the face of a "macroeconomic scenario that has increased the risks for the convergence of inflation to the (official) target of 3%", indicated a communiqué from the Central Bank's Board, whose five members unanimously . . .

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