Macro Policies and Public Debt in Chile
10 Pages Posted: 13 Apr 2013
Date Written: October 1, 2012
This note characterises the evolution of Chile's public debt, and discusses its implications for the management of the country's monetary policy. Historically, the main issuer of public debt in Chile was the central bank. The government, in turn, has recently started to engage in a more active debt policy, with the aim of deepening the market for risk-free securities and diversifying its funding sources. In general, the soundness and predictability of fiscal policy and the high degree of coordination between the government and the central bank has meant that the debt policy of the fiscal authority has posed no major challenge for the conduct of monetary policy. Moreover, the government's positive net asset position government has played an important role, allowing the central bank to fulfill its price and financial stability objectives in spite of a negative equity position.
Keywords: Monetary policy, fiscal policy, public debt
JEL Classification: E52, E62, H6
Suggested Citation: Suggested Citation