Chile Consumer Prices Rise More Than Forecast as Policymakers Hold Rate

Chile’s consumer prices rose more than forecast in July, supporting the central bank’s decision to hold its interest steady last week, interrupting a year of aggressive monetary easing amid risks including higher energy costs, Bloomberg News reported. Prices increased 0.7% from June, more than the 0.6% median estimate from analysts in a Bloomberg survey. The annual inflation rate ticked up to 4.6% in the chained series, the National Statistics Institute reported on Thursday.
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Brazil Central Bank Opens Door to Interest Rate Hikes in Hawkish Turn

Brazil’s central bank said it won’t hesitate to raise its interest rate as the inflation outlook worsens, marking a significant change in guidance barely a month after pausing a monetary easing cycle, Bloomberg News reported. The committee “unanimously reinforced that it will not hesitate to raise the interest rate to ensure inflation convergence to the target if it deems it appropriate,” central bankers wrote in minutes to their July 30-31 rate meeting, when they held the benchmark Selic at 10.5% for the second straight time.

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Chile Holds Rate at 5.75% in Pause to Yearlong Easing Cycle

Chile’s central bank kept its key interest rate unchanged, surprising most economists by pausing its yearlong easing cycle as inflation pressures increase, while indicating that the halt was likely to be temporary, Bloomberg News reported. Policymakers voted unanimously to hold borrowing costs at 5.75% on Wednesday, as expected by just four of 20 analysts in a Bloomberg survey. The other 16 forecast a quarter-point cut. Central bankers led by Rosanna Costa interrupted an easing cycle that has shaved 550 basis points from rates in just over a year.
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Brazil’s Annual Inflation Tops All Forecasts, Supporting High Interest Rates

Brazil’s annual inflation accelerated more than expected by all analysts in early July, supporting traders’ bets the central bank will have to hike borrowing costs later this year after holding them steady next week, Bloomberg News reported. fficial data released Thursday showed consumer prices increased 4.45% from a year earlier, above the 4.37% median estimate from analysts in a Bloomberg survey. Monthly inflation stood at 0.3%. Policymakers are expected to maintain borrowing costs in double-digits for the foreseeable future as inflation forecasts run above the 3% target.
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