About the financial situation of companies, their aggregate debt decreased in recent quarters, to 113% of GDP as of the third quarter of this year (figure 10). In one year it diminished 0.9% in real terms, explained mainly by the exchange rate effect in the valuation of the external component. This trajectory owes largely to the fact that the increases in corporate bond issuances observed since mid-2016 have not translated into more borrowing. On the contrary, the low cash flow assigned to investment suggests that these funds have been oriented to the refinancing of liabilities, consistently with the lower interest rates. On the other hand, delinquency indicators, while still low, show a marginal deterioration with respect to the previous FSR. In the case of services, this increase has concentrated in some real-estate firms. As for the productive sectors, marginal rises are observed in several industries such as construction, transport and telecommunications, and electricity, gas, and water. Meanwhile, in others such as mining, trade, and manufacturing, the declines identified in the last FSR continue. Residential market figures have shown more stability in recent quarters. After the adjustment process described in previous Reports, the sale of new homes in Santiago has remained stable for several quarters. At the same time, in the second quarter this year, the various home price 8  indicators —in the Metropolitan Region and nationwide— show positive but modest growth. Residential building activity remains weak and different sources of information see no recovery anytime soon.

In particular, because even though expectations have improved in general, they have done so by anticipating a better future economic performance rather than by current results. In this context, we have held the Monetary Policy Rate (MPR) at 2.5% since May and we expect that, if the baseline scenario comes true, we will keep the monetary impulse near its current levels, to begin withdrawing it only once the economy begins to close the activity gap. Anyway, it is important to carefully monitor any downward deviations of inflation in the short term, because in the context of a weak economy, low inflation and some measures of medium-term inflation expectations remaining somewhat below 3%, the convergence of inflation could be affected, in which case it would be necessary to make the already expansionary monetary policy more so. The financial conditions have helped to shape the macroeconomic scenario described above. Borrowing remains accessible and inexpensive, in line with the orientation of monetary policy. The local financial market has seen no major disruptive events and the internal and external payment systems have functioned normally. Non-financial companies maintain their levels of profitability and indebtedness, while the increase in household debt is concentrated in mortgage credit, which covers long periods, at fixed rates and with a prudent loan-to-value ratio, which keeps the financial burden fairly constant. For its part, in the residential real estate sector, sales of new homes stabilized and prices continued to rise, albeit modestly. Nonetheless, some financial risks identified in past reports are still important.