Negative Inflation in Chile

After a number of months of higher than normal inflation due to the increase of petrol, food costs and pretty much everything else you can buy, today the IPC (Indice de Precios al Consumidor) or Chilean Consumer Price Index registered a negative inflation (would that be deflation?) of -1.2% for the month of December, the lowest since 1966. Of course the total inflation of the year 2008 was 7.1%, much higher than previous years.

This drop in December is good news for those that pay their rent in U.F. or have mortgages. By the end of the month you will be paying less since the U.F. is tied to the inflation rate.
For those that don’t know what a U.F. is, this is a snippet from our page about Chilean Money:

The U.F.
Sometimes you will see prices in newspapers or on billboards selling houses and apartments in U.F. (Unidad de Fomento). This is a unit of money used mainly in business and formal financial transactions that involve large sums and was created at a time when inflation was high. It is frequently used with rental contracts and buying and selling homes or businesses. The rate of the UF varies daily according to the monthly inflation rate and the exact figure can be found in the newspapers. There are no physical coins or notes. It is only a value.