Tuesday , November 24 2020

President of the Central Bank highlights the IMF report on Chile



President of the Central Bank (BC) Mario Marcel, Referred to Article IV of the International Monetary Fund (IMF), which referred to reality in Chile.

"The conclusions of the IMF report on the current situation and outlook for the Chilean economy are in line with the vision of the bank, reflected in its latest monetary policy report in the RPM protocol for October.", Said Marcel.

"The economy has advanced significantly in the recovery of growth, which, while closing the gaps in activity, will match the potential for long-term growth and raise the inflation rate", Said the president of BC.

"This will allow the central bank to attract the monetary stimulus to ensure that inflation converges to the target policy, The report coincides with the recent media of the BC Council regarding the need to progress gradually and cautiously in the process of monetary normalization "Said the expert.

Marcel noted this "It is amazing the importance that the report assigns to the new global banking law as the legal framework that will strengthen the solvency of the banking system and strengthen the pro-federal macroeconomic policy in Chile."

In addition, the BC leader explained that "the recognition that the report makes for four important components of central bank policy is also valuable: (a) monetary policy framework for medium-term inflation; (B) the role of the exchange rate as a buffer for external shocks; (C) the low exchange rate exposure and the financial strength of the business sector, and (d) the high credibility of monetary policy.

"All of these factors, together with solid macroeconomic fundamentals, explain the high resilience of the Chilean economy to external vortices, which are also mentioned in the report. He also stressed his appreciation of recent improvements in the formulation and communication of monetary policy by the central bank ", Said Marcel.

BC president noted that "it is important to consider some of the pending challenges of financial legislation beyond the LGB mentioned by the IMF, among others are strengthening of the decision of the bank and deposit guarantee regime, coordination between supervisors, development of unified credit registration and control of conglomerates.

"These are issues to be addressed after initial steps have been taken in LGB implementation and this should be significantly advanced at the time of financial system assessment (FSAP), agreed between the authorities and the IMF.Said Marcel.


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