Local consumer prices rose 0.8% in the month, government statistics agency INE said on Wednesday, accelerating from the 0.3% reported in the previous month and above an expected 0.5% in a Reuters poll of economists. The monthly figure took the Andean country's 12-month rate of consumer price increases to 12.3%, still far from the central bank's target range of 2% to 4% although below the 12.8% seen in December. The Chilean peso strengthened roughly 0.8% against the U.S. dollar after the inflation report, which is seen providing further support to the view that interest rates will be held at their current level in coming months. In a bid to tame inflation, which ended 2022 at the highest level in more than three decades, Chile's central bank ramped up its benchmark rate by a cumulative 1,075 basis points from July 2021 to October 2022, and has since kept it at 11.25%. "Headline inflation remains relatively high, despite the emerging downshift," Pantheon Macroeconomics' chief economist for Latin America, Andres Abadia, said in a note to clients. "Policymakers will have to maintain a cautious approach and keep interest rates on hold over the coming meetings, until core inflation consolidates the downtrend."
INE said the January increase came on the back of higher food and non-alcoholic beverages prices, as well as alcoholic drinks and tobacco prices, with 11 of the 12 groups surveyed posting monthly rises. (Reporting by Fabian Andres Cambero and Gabriel Araujo; Editing by Steven Grattan and Kylie MacLellan)
