Key insights
- Chile's central bank considered a rate hike due to global uncertainty from the U.S.-Israeli war on Iran, potentially impacting commodity prices and inflation. While they held rates steady, the discussion highlights global inflationary pressures and geopolitical risks, which could indirectly influence US market sentiment if these risks escalate.
SANTIAGO, May 7 (Reuters) - Policymakers at Chile’s central bank considered the option of raising interest rates at their April meeting amid global uncertainty stemming from the U.S.-Israeli war on Iran, the meeting minutes showed on Thursday.
The bank’s board unanimously voted to hold borrowing costs at 4.5%, but for the second consecutive meeting some members indicated "there was reason to consider" the option of a 25-basis-point hike, the bank said.
All board members agreed that the prolongation of the war and its impact on oil and other commodity prices were increasing the risks to inflation and economic activity.
But "there was insufficient information to warrant a change in the strategy in place," the bank added.