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UPDATE 2-Chile's central bank hikes key rate to 8.25%, above expectations

(Adds central bank’s comments, context)

SANTIAGO, May 5 (Reuters) - Chile’s central bank hiked the country’s benchmark interest rate to 8.25% on Thursday, above expectations, from 7.0% previously, as authorities worldwide tighten monetary policy to keep a lid on stubbornly high inflation.

The bank’s board members voted unanimously for the increase of 125 basis points, the central bank said in a statement.

Analysts polled by Reuters had expected the bank to increase the rate to 8.0%.

The latest move follows a series of rate hikes by the bank since the middle of last year to curb inflation as the Andean copper producer’s economy has bounced back strongly from the impact of the coronavirus pandemic.

Chile’s consumer prices rocketed 1.9% in March, the highest monthly rise in almost thirty years, while the rolling 12-month rate rose further to around 9.4%, the highest since 2008, underscoring the challenge for authorities as they battle spiraling inflation exacerbated by rising global commodities costs.

Monetary policy authorities around the world, from the U.S. Federal Reserve and Bank of England, to the Bank of Mexico and Brazil’s central bank, have also raised rates to their highest levels in years as inflation pressure has become a global phenomenon.

“World inflation has continued to rise, and central banks have intensified the withdrawal of their monetary stimuli,” Chile’s central bank said in a statement.

“This has taken place in a scenario of still high commodity and food prices and confinements in China have put additional pressures on the recovery of global supply chains.” (Reporting by Fabian Cambero and Brendan O’Boyle; Writing by Anthony Esposito; Editing by Chris Reese)

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