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Central Bank of Chile Keeps Rate at 5.25%

November 17, 2011 by CentralBankNews   Comments (0)

The Banco Central de Chile held its monetary policy interest rate unchanged at 5.25%.  The Bank noted: "Domestically, output figures are evolving close to projections in the last Monetary Policy Report's baseline scenario, while domestic demand is somewhat stronger. Labor market conditions remain tight. Headline inflation has been somewhat higher than expected because of the incidence of fuels and foodstuffs. Core inflation figures remain contained. Inflation expectations are close to the target.

Chile's central bank previously also kept the monetary policy interest rate unchanged at 5.25% at its October meeting.  The Bank last raised its monetary policy interest rate by 25 basis points to 5.25% at its June meeting this year.  Chile reported annual consumer price inflation of 3.7% in October, compared to 3.3% in September, 3.2% in August, 2.9% in July, 3.4% in June, 3.3% in May and 3.2% in April this year; within the Bank's inflation target of 2-4%.  

The Chilean economy grew 8.4% in the first half of 2011, driven by strong domestic demand; full year GDP growth is expected around 6.5%, while inflation is seen around 4% by the end of the year.  The Chilean Peso (CLP) has weakened about 9% against the US dollar so far this year, while the USDCLP exchange rate last traded around 511.5.

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Bank of Japan Keeps Monetary Policy Settings Unchanged

November 17, 2011 by CentralBankNews   Comments (0)

The Bank of Japan held its interest rate steady at 0-0.10% and made no changes to its 55 trillion yen quantitative easing program.  The Bank said: "Japan's economic activity has continued picking up, but at a more moderate pace mainly due to effects of a slowdown in overseas economies.  As for domestic demand, business fixed investment has been increasing moderately and private consumption has remained firm.  On the other hand, exports and production have continued to increase, due in part to the restocking of inventories abroad that had declined after the earthquake, but at a more moderate pace mainly reflecting the effects of the slowdown in overseas economies."

At its October meeting the Bank of Japan expanded its asset purchase program by another 5 trillion yen to 55 trillion yen, and previously announced additions to its quantitative easing program during its August meeting.  The Bank had previously changed its asset purchase program in March this year, when it added a further 5 trillion yen to its target.  Japan reported annual headline consumer price inflation of 0% in September, down from 0.2% in both August, July and June, and 0.3% in both May and April.  

The Bank has previously forecast real GDP growth of 0.2-0.6% in fiscal 2011, and 2.5-3.0% in fiscal 2012.  Meanwhile, nominal GDP growth in Japan was recorded at -0.5% in June and -0.9% in March, placing it at -1% in both quarters on an annual basis.  The Japanese Yen (JPY) has gained around 6% against the US dollar so far this year; the USDJPY exchange rate last traded around 76.98

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