Central Bank

Yesterday I commented about the pessimism in Argentine businessmen. But Argentine entrepreneurs are not the only ones who are not in a good mood also entrepreneurs Chileans are more than concerned by the situation in which the Chilean economy. In 2007, the strong appreciation of the Chilean peso had been the central concern of the Chilean businessmen. In recent months, and product of an active policy carried out by the Central Bank of Chile, the fall in the international price of copper and a strengthening dollar worldwide, the exchange rate for the Chilean currency has depreciated significantly, being the Chilean peso, the currency that most weakened against the dollar in the month of May. The depreciation in the exchange rate should have brought a certain calm to Chilean entrepreneurs, but at the time that the exchange rate be accommodated down, other negative factors have undermined the context in which they operate companies by what the improvement in the exchange rate could not be fully exploited by employers. Inflation is perhaps one of the evils that has struck the Chilean economy stronger and that it has promoted to 8.3% in April interannual variation, when the target objective of the Central Bank of Chile is of 3% with a margin of one percentage point on either side. The inflation rate which has been suffering the Chilean economy has partly decreased the improvement of the competitiveness of the economy.

The inflationary problem is that monetary policy is facing a more restrictive bias for the next few months. That is what left the show at the last meeting the Council of the Central Bank of Chile who were discussed at the meeting on May 8 between maintaining or raising the reference rate that is 6.25%. For worse, the price of fuels does not stop its rise and this affects the costs of production.