PREVIEW-Chile c. bank to hold rate in May then raise slowly

WHAT: Central bank monetary policy meeting for May

WHEN: Thursday, May 13 at 6 p.m. (2200 GMT)

REUTERS FORECAST: Chile’s central bank will keep its
benchmark interest rate at a record low of 0.50 percent in May
and gradually start raising them in June or July, a Reuters
poll of 20 financial players and analysts showed. Only two
analysts said the bank could raise the rate by 25 basis points
after inflation quickened in April.

Chile’s Central Bank President Jose De Gregorio told
Reuters last week that he saw a gradual normalization of the
bank’s key interest rate in coming months. He added, however,
that monetary policy would remain “very expansionary.” For more
details click on [ID:nN04117553]

FACTORS TO WATCH: Analysts will be watching upcoming
inflation data and the monthly economic activity IMACEC index
to predict a more precise time-frame for a possible rate hike.

Economic data in April is expected to still show some
impact of the Feb. 27 earthquake.

The massive 8.8-magnitude quake and ensuing tsunamis killed
hundreds, ravaged towns and infrastructure and hit key
industries such as fishery, forestry and fruit farming in
south-central Chile.

MARKET IMPACT: Most analysts see little market impact from
the rate decision as the market has already priced in the bank
as holding rates steady for a tenth month running. Markets are
more likely to move on details the central bank spells out in
its monetary policy communique on the overall state of the
economy.
Stock Market Money

(Reporting by Maria Jose Latorre; Writing by Alonso Soto;
Editing by Padraic Cassidy)

PREVIEW-Chile c. bank to hold rate in May then raise slowly