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Peru hikes & Chile holds, gradual tightening ahead

The decision by Peru’s central bank to hike interest rates for a second consecutive month underlines its concerns about above-target inflation and we have brought forward our forecast for 50bp of further hikes to this year, from 2017. Meanwhile, despite leaving rates on hold, we expect at a further 25bp hike in Chile this year. Crucially, however, the pace of tightening in both economies will remain gradual.

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