Chile’s BCCh cut the policy rate by 75bp to 8.25% in a unanimous decision, reaccelerating the pace of easing after slowing it in October. The communique had more dovish tints and the board signalled more cuts are needed although they did not pre-commit to a path, saying the magnitude of the cuts will be based on incoming data. With stabilisation in the FX and sizeable inflation base effects into 1Q24, there is room for continued easing at high speed, particularly if backed by a faster slowdown in global growth.
For more, including implications for rates and FX views, please see full note.