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Chile cenbank to cut interest rate this week -poll of traders

Credit: REUTERS/IVAN ALVARADO

Chile's central bank is expected to lower interest rates to 1.63% this week and cut again in January, a monthly poll of 60 traders showed on Tuesday, yet another sign of the economic toll taken by weeks of unrest in the South American nation.

SANTIAGO, Dec 3 (Reuters) - Chile's central bank is expected to lower interest rates to 1.63% this week and cut again in January, a monthly poll of 60 traders showed on Tuesday, yet another sign of the economic toll taken by weeks of unrest in the South American nation.

Chile's peso CLP=CL plunged against the dollar last week, twice hitting historic lows amid protests over inequality that have left at least 26 dead. Businesses have reported at least $1.5 billion in losses.

Tourism, transportation and commerce have all been hobbled.

Traders predict rates will settle at 1.50% through the first half of next year as the central bank seeks to stimulate the sputtering economy.

Traders predicted consumer prices would rise slightly in November and December. Annual inflation is expected to hit the bank's target of 3.00%, according to the poll.

The Chilean government announced plans on Monday to roll out a $5.5 billion economic recovery plan and issue more debt in foreign currencies after rioting and protests triggered the worst monthly contraction in a decade.

Median estimate (pct)

Inflation in Nov

0.10

Inflation in Jan

0.20

Inflation over 12 months

3.00

Interest rate in December

1.63

Interest rate in March 2020

1.50

Interest rate in 12 months

1.75

Exchange rate in 28 days (peso/$)

800.00

(Reporting by Dave Sherwood; Editing by Catherine Evans)

((dave.sherwood@thomsonreuters.com; +56 9 9138 1047, +56 2 2370 4224; Reuters Messaging: dave.sherwood.thomsonreuters.com@reuters.net))

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