December 14, 2007
Chile's central bank raised the benchmark interest rate by 25bp to 6% Thursday, surprising most analysts who thought the rate would be kept on hold. Credit Suisse was among the few shops predicting a hike. "By tightening today, against market expectations, the bank would send a strong signal of discomfort about current inflation levels (headline and core) and would contribute to the reduction of second-round effects. In our opinion, inflation risks in Chile have been underestimated, while risks to the growth outlook have been exaggerated," according to a Thursday report. Separately, Moody's' Mauro Leos told Bloomberg Thursday the agency considering raising Chile's outlook to positive from stable next year because of rising copper exports.