President of the Central Bank (BC), Mario Marcel, referring to Article IV of the International Monetary Fund (IMF), which addresses the reality in Chile.
"Conclusions from the IMF Report on the current situation and prospects for the Chilean economy are in line with the Bank's vision, reflected in the latest Monetary Policy Report and in the minutes of the RPM for October.", Marcel said.
"The economy has advanced significantly in the recovery of growth, which, because it will close the gap in its activity, will adjust to the potential for long-term growth and increase the inflation rate", said the president of BC.
"This will allow the Central Bank to withdraw monetary stimulus, to ensure inflation convergence against policy objectives. In that sense, the report coincides with the latest communication from the BC Council regarding the need to progress gradually and carefully in the monetary normalization process "said the specialist.
Marcel shows that "It is extremely important that the Report establishes the new General Banking Law as a legal framework that will strengthen the solvency of the banking system and strengthen macro-pro-federal policies in Chile."
Likewise, the BC leader explained that "the recognition that the report makes four very important elements of Central Bank policy also valuable: (a) the monetary policy framework for medium-term inflation goals; (b) the role of exchange rates as a buffer for external shocks; ( c) low exchange exposure and financial strength of the Chilean corporate sector, and (d) the credibility of high monetary policy.
"All of these factors, along with solid macroeconomic fundamentals, explain the high resilience of the Chilean economy to external turbulence, which is also mentioned in the Report. He also highlights his assessment of the latest improvements in the formulation and communication framework of monetary policy by the Central Bank", Marcel said.
President SM pointed out that "it is important to consider some of the pending challenges of financial laws outside the LGB mentioned by the IMF, including strengthening bank resolutions and deposit guarantee regimes, coordinating between supervisors, developing integrated credit registration and conglomerate supervision".
"This is a problem that must be addressed once the initial steps have been taken in implementing the LGB and it must be significantly advanced at the time of the Financial System Assessment (FSAP), which was agreed between the authorities and the IMF. For 2020"Marcel said.