Rate Swaps Fall


Chile’s one-year interest-rate swap rate fell 6 basis points, or 0.06 percentage point, to 3.57 percent. The two-year rate lost 10 basis points to 4.07 percent.

Policy makers have discussed intervening in the currency market, bank President Jose De Gregorio said Oct. 6 in prepared remarks. Chile’s central bank last intervened in 2008 by buying dollars in the spot market in daily tranches.

Policy makers have raised interest rates in their last five monthly meetings, saying in a statement accompanying the October decision they would continue to remove the monetary stimulus at a pace that depends on economic conditions. At 2.75 percent, Chile has the lowest benchmark interest rates of the major Latin American economies tracked by Bloomberg.

Chile may experience inflationary pressure in coming months as the economy expands on surging internal demand and the unemployment rate falls, Alejandro Puente, an economist with Banco Bilbao Vizcaya Argentaria SA, said in a Nov. 5 interview.

Consumer prices increased 0.4 percent in September from the previous month after declining 0.1 percent in August. Annual inflation was 1.9 percent in September and 2.6 percent in August. Annual inflation will reach 3.3 percent in 12 months, according to the median estimate of 49 traders and investors in an October 27 central bank survey.

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