25-Basis Point Rate Hike in Chile

The Central Bank of Chile met market expectations, raising its benchmark interest rate by 25 basis points to 2.75%.  A statement from officials noted that inflation and expected inflation had eased and, related to this as a causal agent, the peso continues to appreciate against the dollar.  Growth was brisk in the second quarter at 18.4% annualized and 6.5% in on-year terms, but the other factors enabled the central bank to halve the size of its rate increase.  Increases of 50 basis points apiece had been made in June, July, August and September.  Over the first seven months of 2009, the benchmark interest rate was slashed from 8.25% to 0.50%.