Chilean rates on hold, but further hikes are likely

Last night, the Central Bank of Chile (CBC) held interest rates at 3.25% but highlighted the need for further monetary tightening. Accordingly, we are sticking to our below-consensus forecast for rates to rise to 5% by year-end with increases in bank reserve requirements too. But with concerns over the strength of the peso likely to persist, the risks to our view are to the downside.

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