Chile Rate Hike Predicted

Chile Rate Hike Predicted

Bonds Corporate & Sovereign Strategy

Chile looks set to raise rates Thursday to stem inflation, but analysts are divided on the magnitude of the increase. Merrill Lynch says it will add 25bp to 8.50% at the Thursday meeting, while Goldman Sachs expects 25bp-50bp. “On one hand, actual and expected inflation remain pressured, and CLP weakness adds to the risk of expectation and wage contamination. On the other, the global backdrop has deteriorated markedly since the last meeting, raising the prospect that deflationary forces may shif

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