BCCh to keep rate unchanged at its May meeting

The BCCh paused in November after having reduced the overnight rate by a total of 200bp to 3.0% since October 2013 and no changes are expected in this stance through this year.

The central bank's recent statements, including that in April, have been neutral, reflecting the environment of low growth and the uncertain external situation. Despite continued weakness on the growth front, the bank probably sees additional easing futile as a substantial part of the growth deterioration could be structural (vs cyclical). 

Moreover, inflation has been more stubborn than initially assumed owing to the sharp depreciation of the peso and the surprisingly stronger labour market. As a result, the current stance could be considered fairly accommodative. Therefore, no additional monetary easing seen in this cycle according to Societe Generale.