Mario Marcel: Chile's March 2019 Monetary Policy Report

Presentation by Mr Mario Marcel, Governor of the Central Bank of Chile, before the Finance Committee of the Honorable Senate of the Republic, Santiago de Chile, 1 April 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I. Introduction

Mister President of the Senate's Finance Commission, Senator Ricardo Lagos-Weber, Senators members of this Commission, ladies, gentlemen,

I am grateful for your invitation to present the vision of the Board of the Central Bank of Chile on recent macroeconomic developments, their prospects and the implications for monetary policy. This vision is contained in detail in the Monetary Policy Report (IPoM) of March 2019, released this morning. These antecedents provide the background for the decision adopted by the Board at the Monetary Policy Meeting last Friday.

At that Meeting, we decided unanimously to keep the Monetary Policy Rate (MPR) at 3%. At the same time, we noted that, in line with the lower level of inflation and its outlook, it would be necessary to maintain the monetary stimulus for a longer period, taking a break in the process of MPR normalization that began last October. To the extent that the economy continues on the foreseen path, this process should be resumed in the medium term to ensure the convergence of inflation within the policy horizon.