Chile's de Gregorio Named
Chilean President Michelle Bachelet named Jose de Gregorio the new head of the central bank as the country tries to control the fastest inflation in a decade.
De Gregorio, 48, has been a vice president at the bank since December 2003 and previously worked as an economist at the International Monetary Fund. He will replace Vittorio Corbo, 64, when his term expires Dec. 7.
Chile's central bank raised its benchmark rate three times this year to 5.75 percent as inflation, pushed by global energy and food prices, climbed above the bank's target range of 2 percent to 4 percent. Annual inflation rose to a 10-year high in October of 6.5 percent.
``De Gregorio is a very good option,'' Miguel Cardoso, the head of economic research at BBVA Chile, said by phone from Santiago. ``He's a big defender of the current inflation target monetary policies.''
Chile's economy has more than doubled during Corbo's tenure as surging global demand for copper helped boost exports and lower unemployment in South America's fourth-largest economy. At the same time, the country's dependence on energy imports has made it vulnerable to global price increases and supply shortages from neighboring Argentina.
The new bank president probably won't make any big changes in policy, according to economists such as Cardoso.
Chile's central bank held its overnight lending rate unchanged for a second month in November on the expectation inflation will ease amid weakening economic growth. Corbo said Nov. 15 that he expects inflation to slow to 3 percent over the next one to two years.
Chile's economy expanded 4.1 percent from July through September, the slowest pace in a year. The country has grown 4 percent or more every year since 2003.
``I would expect de Gregorio to be a little bit easier on economic policy -- a little bit more to the dovish side and slightly more concerned about economic growth,'' said Valentin Carril, who oversees $3 billion as chief executive officer of Principal Asset Management SA in Santiago.
Bachelet nominated Sebastian Claro, an economist at Chile's Catholic University, to join the central bank board, Finance Minister Andres Velasco told reporters in Santiago. Claro's appointment is subject to congressional approval.
Chile's national statistics institute will release November inflation data tomorrow at 6 a.m. New York time. Prices probably rose 0.4 percent in November from the previous month, according to the median estimate of 16 economists surveyed by Bloomberg.