monetary policy report presentation before the finance committee of the honorable senate of the republic∗ mario marcel governor central bank of chile 2 april 2018 see the march 2018 monetary policy report at http : / / www. bcentral. cl. ∗ mr. president of the senate ’ s finance commission, senator juan pablo letelier, senators members of this committee, ladies, gentlemen, i am grateful for your invitation to present the vision of the board of the central bank of chile on the latest economic developments, their perspectives and implications for monetary policy. this vision is contained in detail in our monetary policy report ( the report ) of march 2018. first and foremost, let me introduce to you our new board member mr. alberto naudon, who became part of the board only a few days back, after being unanimously recommended by this committee and then his appointment approved, also unanimously, by the senate. it is worth noting that this is the first time we present the report under the new monetary policy scheme that we began this year and under which we have tied its release with the monetary policy meetings. with these changes, we have significantly increased the information we deliver, establishing its relationship with monetary policy decisions more clearly. the greater transparency required by this scheme makes it necessary for the dates of our meetings and the subsequent publication of the monetary policy report to be communicated to the market well in advance, so that there are no surprises in this regard. for the same reason, as was the case with this report, the time span between the report ’ s publication and this presentation has been a little longer. please note that we see this delay as a one - time thing and we are willing to attend this committee to present our monetary policy reports with all the haste that you may require. we have used this opportunity to add some information that came after the report ’ s cutoff date to this presentation, plus some issues that have come up in the days following its publication. thus, we look forward to an exchange with the committee as enriching as it can be. now let me share with you the main conclusions and projections of our report. first, it is important to stress that this report clearly marks a turning point in the business cycle that translates into higher growth and lower risks to both activity and inflation. the national accounts figures we published two weeks ago showed two important developments. on one hand, the economy was quite weak between late 2016 and early 2017. in retrospect, these figures are consistent with other recent

the analysis of the information set out above, the supervisory council holds that the risks around the expected inflation trajectory remain balanced. on the demand - side, below - potential economic growth will continue to generate low inflationary pressures, while supply - side shocks are also expected to remain contained. at the end of discussions, the supervisory council decided to keep the key interest rate unchanged at 4. 25 %. this decision aims to create adequate monetary conditions for meeting the inflation target in the medium run. it also provides proper support to boost aggregate demand. bis central bankers ’ speeches