Forex News

The Central Bank of Chile will be buying the U.S. dollars in 2008 in order to stimulate the economy by the weaker national currency.

Chilean peso fell from it’s recent record high value against the U.S. dollar yesterday as the copper price slid down significantly on the global concerns of thedecveloped economies’ slowdown.

Chilean peso gained yesterday against other currencies, notably against the U.S. dollar, after the Central Bank of Chile President, José de Gregorio, commented that the bank will have to increase rates again on the next meeting.

Central Bank of Chile decided yesterday to raise the main national lending rate from 6.00% to 6.25% in order to reduce the threat level of the rising inflation, which has now reached its highest level in almost ten years.

Chile’s Consumer Price Index increased unexpectedly last month by more than analysts forecasted, increasing the odds that the Central Bank of Chile will raise the refinancing interest rate on the next week’s meeting to fight the record breaking high inflation.

Yesterday Chilean central bank increased its interest rate by 0.25 basis points up to 6.0%. It was the first rate hike in Chile since September 13 this year.

The Central Bank of Chile will be releasing its statement with the target interest rate. The current interest rate is maintained at 5.75% after three rate hikes by 0.25% going in a row from July to September 2007. Majority of the analysts surveyed about the forthcoming rate decision agree that the Chilean interest rate will remain at the same level.