Market bets on Central Bank keeping the interest rate stable

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SANTIAGO.- The market is currently working under the assumption that the Central Bank will maintain the interest rate at a stable 6.25% after inflation and growth figures have been reported at below predicted levels.

In a poll taken by Reuters yesterday, all 23 of the analysts questioned predicted that there would be no change in the benchmark rate during the Central Bank's monetary policy meeting for February.

Yesterday, the National Statistics Institute (INE) reported that the Consumer Price Index (CPI) registered no change during January, dropping the country's 12-month inflation rate to 7.5%, compared to 7.8% in December of 2007.

The Central Bank announced that the Monthly Economic Activity Indicator grew 3.7% in December 2007 when compared to the same month during 2006. This growth however, falls below the 4.5% that had been previously predicted by analysts in a Reuters poll.

The Central Bank has raised the interest rate five times since July 2007, due to a high inflation rate. Meanwhile, in the United States, the Federal Reserve drastically cut the benchmark interest rate, with the hope of boosting the world economy.