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Chile: tightening cycle has ended but rates will stay high

Chile’s central bank (BCCh) became the latest in the emerging world to end its tightening cycle yesterday. But with inflation only likely to fall back towards target in late-2023 and the external position in a fragile state, monetary policy will be kept tight for a prolonged period. We think that rate cuts will only come on to the agenda in Q2 next year, which is later than most other analysts envisage.

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