Mario Marcel: Chile's June 2019 Monetary Policy Report

Presentation by Mr Mario Marcel, Governor of the Central Bank of Chile, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 10 June 2019.

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

I. Introduction

Mr 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, outlook and monetary policy implications. This vision is detailed in our June 2019 Monetary Policy Report released this morning. Its contents also provide the background for the decision adopted by the Board in its monetary policy meeting of last Friday.

There we decided unanimously to reduce the Monetary Policy Rate (MPR) by 50 basis points, taking it to 2.5%. Key in this decision was our evaluation that the monetary policy had to be recalibrated, because the delivered impulse was not enough to ensure the timely convergence of inflation to the 3% target in light of the new CPI figures and the new estimates for the activity gap and the neutral monetary policy rate.