Chile & Peru MPCs hint that tightening done, but hikes still likely

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.