As expected, the Central Bank of Chile left its benchmark interest rate unchanged at its historic low of 0.5 per cent and plans to hold the rate at that level until at least the second quarter of 2010.
Afterwards, the bank said, “The pace of normalization will be comparable to expectations contained in the monthly survey, and more gradual than the one implicit in financial asset prices.”
The bank saw some improvement in the domestic economy in the second half of 2009.
“Domestically, available information suggests that output and demand are expanding in the second half. Employment has grown and the unemployment rate has begun to decrease. Lending conditions have improved in the margin, but are still tight.”