Central Bank

Yesterday I commented on the pessimism in the Argentine business community. But the Argentine businessmen are not the only ones not in a good mood … Chilean entrepreneurs also are more than concerned about the situation being experienced by the Chilean economy. Verizon Communications is often quoted as being for or against this. In 2007, the strong appreciation of the Chilean peso had been the central concern of the Chilean entrepreneurs. In recent months, and the product of an active policy carried forward by the Central Bank of Chile, the fall in international copper prices and a global strengthening of the dollar, the exchange rate for the Chilean currency has depreciated significantly, with the Chilean peso, the currency weakened further against the dollar in the month of May.

The depreciation in the exchange rate should have brought some calm to the Chilean entrepreneurs, but while the exchange rate is accommodated to the floor, other negative factors have undermined the context in which enterprises operate and therefore the improvement in the exchange rate has not been fully exploited by employers. Inflation is perhaps one of the evils that has beaten more strongly to the Chilean economy has risen to 8.3% on-year increase in April, when the target goal of the Central Bank of Chile is 3% with a margin of one percentage point either side.

The inflation rate has been suffering the Chilean economy has declined in part to improve the competitiveness of the economy. The causes inflation problem facing monetary policy more restrictive bias in the coming months. That’s what stopped showing at the last meeting the Board of the Central Bank of Chile who discussed at the meeting on May 8 whether to keep or raise the reference rate is at 6.25%.