Having left interest rates unchanged last night, the Chilean and Peruvian central banks both removed the reference to a tightening bias in their accompanying statements. However, with inflation likely to remain higher than policymakers expect over the next year, we still ultimately expect rates to rise a bit further in both countries. Our forecast is now for 50bp of hikes in Chile (previously 75bp) and 75bp in Peru (previously 125bp) by end-17.
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