Chile's economy is expected to grow between 5.5 percent and 6.5 percent in 2011, Central Bank President Jose de Gregorio said on Monday.
Presenting a monetary policy report to members of the finance committee in Chile's Senate, De Gregorio said that Chile's economy continues to follow a model of monetary flexibility that allows for a sustainable growth and a solid economic recovery.
Annual inflation in Chile this year is forecast to increase 4.3 percent in 2011, higher than the initial forecast of 3 percent, said De Gregorio.
He said, however, that during some quarters of the year the inflation will surpass the target of 3 percent due to the seasonal increase in food prices, oil and other petroleum products.
He also said that Chile's healthy Gross Domestic Product (GDP) growth of 5.2 percent in 2010 had helped boost a growth in employment and an increase in salary levels, that is helping the country's economy this year.
Chile's monetary policy is a key to the overall economic recovery, he added, saying a program announced by the Central Bank in January to buy foreign currency in order to ease pressure from foreign exchange rates will help increase Chilean national reserves to similar levels as that of other emerging market economies.
This monetary program includes the purchase of 12 billion U.S. dollars between January and December 2011 of which the Central Bank to date has bought 3 billion dollars, De Gregorio said.
He added that this has allowed the Chilean peso to maintain an exchange rate between 465 pesos and 500 pesos per dollar. /.