Interest rate could continue to fall over next few months

SANTIAGO.- Some councillors belonging to the Central Bank forecasted during their most recent gathering that the monetary policy rate will be between 1.0% and 0.75% by the third semester to guarantee the most recent inflation forecasts and to augment economic activity.

The councillors decided to lower the rate by 50 base points at their May meeting, leaving the monetary policy rate at a historic level of 1.25%, even though the possibility of reducing the figure by a quarter of a percentage point was considered.

One councillor pointed out that the Monetary Policy Report released for May includes the nation’s latest economic forecasts and supports a significant cut to the monetary policy rate.

The latest Monetary Policy Report predicted that inflation would reach 0.6% this year, while it could be at 2.3% in 2010 according to the spectrum currently forecasted by the Central Bank.