2023-05-12 22:03:00
The Board of the Central Bank repeated the dose of its last meetings and maintained the Monetary Policy Rate (TPM) at 11.25% for the fourth consecutive time, a decision that was adopted unanimously by the board members.
In the statement, the entity did not give concrete signals regarding the possibility of reducing the TPM in the short term, as a part of the market was betting on. The latest surveys point to an adjustment that might materialize in the July meeting.
Yes indeed, removed from its communication the phrase “the economy is adjusting slower than expected and inflation is taking longer to come down.” Therefore, he somewhat softened the message regarding last month’s meeting.
“In coherence with a scenario in line with the forecast, the Board considers it appropriate to maintain the TPM at 11.25% until the state of the macroeconomics indicates that the process of inflation convergence to the 3% target has been consolidated” , noted the Council.
At the same time, it reaffirmed its “commitment to act with flexibility in the event that any of the internal or external risks materialize and the macroeconomic conditions so require.”
Your vision of the local economy
The Central Bank stressed in its statement that the performance of the economy was “in line with what was expected in the March Report”. This despite the negative figures presented by mining in the latest Monthly Index of Economic Activity (Imacec), which as a whole fell by 2.1% in March.
In its decision, the issuing entity pointed to a consumption that continues to adjust downwards, an investment that remains “weak”, and the unemployment rate that, according to the National Institute of Statistics (INE), closed the first quarter of 2023 with an increase of 8.8%. Wages are also recovering, the entity stated.
Given these factors, the autonomous entity concluded that “the perception of the economy by companies and households continues on pessimistic ground”.
Regarding inflation, expectations remain at 3% by the end of 2024. “Total and subjacent inflation have evolved in accordance with what was projected in the March Report. In April, the annual variation of the CPI decreased to 9.9%. The underlying part also showed a decrease in its annual variation -10.3% in April-, although this has been less than that observed in total inflation”, said the directors.
The financial field
In the local financial market, the nominal exchange rate is at levels somewhat lower than those of the last monetary meeting, while the IPSA increased, the bank noted in the statement.
“Long-term interest rates are at somewhat higher levels. Bank credit remains limited”, says the statement on the Chilean market.
As for international markets, the bank said that “global financial conditions have not shown significant changes in the last month.” Still, he warned that there remains a “significant level of uncertainty”.
Las foreign currencies “have appreciated once morest the dollar and the stock markets have risen slightly”. And oil falls by approximately 8%, “a drop that is around 5.5% for copper,” the entity stated.
Regarding inflation at a global level, the bank highlighted that although it has fallen in several economies, the underlying indicators remain at “high levels, signaling the risks regarding their convergence.”
The main central banks raised their reference rates once more. In this context, the Federal Reserve has signaled a possible pause, while the European Central Bank has indicated that it still has to raise. World growth prospects for this year remain weak, was part of the autonomous entity’s analysis.
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