Central Bank keeps the monetary policy rate

After it's monthly monetary meeting, the Chilean Central Bank decided to keep the monetary policy interest rate at 5% (annual).  The board of the institution based it's decision in the improvements showed by the international financial conditions.

According to the statement released by the Central Bank, the Eurozone remains in recession and in a fragile fiscal and financial situation, while there is increased optimism in the United States and Japan. Incoming indicators for China and other emerging economies point at marginally weaker growth, while several central banks have lowered their policy rates. The dollar has appreciated in international markets. Metal prices receded in recent weeks, especially for copper.

Domestically, first-quarter indicators show decelerating out put and demand. The labor market is still tight. Headline and core inflation measures remain close to1% y-o-y, while surveys suggest that inflationary expectations over the policy horizon remain around the target. The exchange rate has depreciated; however, in real terms it is still in the lower part of the range that is compatible with its long-term fundamentals.