Manufacturing activity in Chile surprised to the downside; we continue to expect further monetary stimulus

Based on the disappointing data from manufacturing and mining, activity appears to have floored in August; the labor market is showing fresh signs of weakness. The minutes of the last monetary policy meeting suggest that the policy rate is close to the level that the economy requires even though we expect additional stimulus dependent on inflation figures in the short term. In Peru the central bank cut reserve requirements for deposits in local currency while Fitch Ratings affirmed its sovereign credit rating of BBB + with a stable Outlook.

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