Chile Brings Forward Rate Decision as Social Unrest Hits Economy

(Bloomberg) -- Chile’s central bank will hold its next monetary policy decision two days earlier than scheduled in a bid to provide “timely information” about the country’s economic situation following weeks of social unrest..Policy makers will make the rate decision on Dec. 4 and present their quarterly monetary policy report, known as the IPOM, the next day at 8:30 a.m. local time, according to an emailed statement. Previously, the rate decision was scheduled for Dec. 6 and the IPOM for Dec. 9..Chile has cut its benchmark interest rate three times since June, most recently by 25 basis points to 1.75% in October. At the time, it said more easing could be needed as the violent protests threatened to slow its economy. Since then, however, investors have scaled back bets of additional rate cuts as continued social unrest has undermined the peso, threatening to push up import costs..What Our Economist Says“When the central bank cut interest rates to 1.75% in October, it said the IPOM would include a complete analysis of the impact from the protests on the economy, including growth, inflation and monetary policy outlook. It could be that the analysis took less than expected, and they want to release their findings as soon as possible. It’s also possible that their analysis shows additional stimulus is necessary and they want to provide this as soon as possible. This would be a big surprise, since the market has been recently moving in the opposite direction.”-- Felipe Hernandez, Latin America economist, Bloomberg Economics.In a bid to appease protesters, President Sebastian Pinera announced on Tuesday that his government will send to Congress in the next few days a plan to rebuild and boost the economy..To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net.To contact the editors responsible for this story: Walter Brandimarte at wbrandimarte@bloomberg.net, Philip Sanders.©2019 Bloomberg L.P.

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Chile Brings Forward Rate Decision as Social Unrest Hits Economy

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