(Bloomberg) — Chile’s central bank wants to hit its 3% inflation target as soon as possible and with the lowest cost for the economy, the institution’s President Rosanna Costa said Monday in an interview with Radio Duna.
“With all of the information from outside and domestically, we will make decisions to have inflation converge to the 3% target,” Costa said. “We’re still not there, and once we get there we need to keep inflation at that level. We need to reach our target at the lowest cost possible.”
Chile’s central bank will publish its next monetary policy decision on April 2. Last week, at a presentation in Santiago, Costa said the monetary authority remains committed to extending a cycle of rate cuts that has so far lowered borrowing costs by four percentage points since July.
In the Monday interview, Costa said the current exchange rate is “information” that the central bank will continue to take into account in its rate decisions.
“It’s not a subject that makes us uncomfortable. It’s something that we need to take into account in our models,” Costa said. “We would react if financial markets weren’t functioning properly, but that is not the case. That isn’t what we are seeing.”
Chile’s peso has been the worst performing emerging market currency this year, with a roughly 10% loss against the dollar. Costa said that trend is explained by the interest rates differential between Chile and the US.
Source: BNN Bloomberg
