News

Chile Holds Interest Rates at 4.5%, As Expected
The Central Bank of Chile maintained its policy rate at 4.5% in a unanimous January decision, citing a more supportive external backdrop and continued progress on disinflation. The board noted improved global conditions, highlighted somewhat stronger US activity and higher copper prices above levels at the previous meeting while warning that geopolitical fiscal and financial risks persist. Domestically activity and demand have broadly matched the September IPoM, with short-term indicators for consumption and investment in line with expectations, even as the Imacec total and non-minero contracted 0.6% and 0.5% month on month in November. The labour market showed little change with the unemployment rate steady and job creation remaining limited. Inflation eased toward target with headline inflation at 3.5% year on year and core inflation at 3.3% in December, and two year inflation expectations remaining anchored at 3%, consistent with convergence to the target over the policy horizon.
Published on 2026-01-27

Chile Cuts Interest Rates By 25 bps, As Expected
The Central Bank of Chile cut its policy rate by 25 basis points to 4.5% in a unanimous December decision, citing a more supportive external backdrop and faster progress on disinflation. The board noted improved global conditions, supported by the US Federal Reserve’s December rate cut, expectations for further easing next year, firmer equity markets, and copper prices rising above $5 per pound. Domestically, activity and demand have broadly matched the September IPoM, with non mining GDP meeting expectations and investment, particularly in machinery and equipment, strengthening, even as overall growth was held back by a weak mining sector. The labour market has improved as the unemployment rate has declined in recent months, though job creation remains limited. Inflation has eased faster than anticipated, with both headline and core inflation at 3.4% year on year in November and two year expectations anchored near 3%, consistent with inflation converging to target by Q1 2026.
Published on 2025-12-16

Chile Maintains Rate at 4.75%
The Central Bank of Chile left its benchmark interest rate unchanged at 4.75% in a unanimous decision during its October meeting, as expected. The board noted that the external environment has evolved largely as projected, with the US Federal Reserve cutting rates amid signs of labour market weakness and a partial US government shutdown. Global financial markets have performed favourably overall, while oil prices fell slightly and copper rose sharply on supply constraints and geopolitical factors. Domestically, activity and demand have evolved in line with projections from the September IPoM, with August’s Imacec contracting 0.7% month on month but rising 0.5% year on year, while the non-mining component increased 1.7%. The labour market continues to send mixed signals, with a mild decline in unemployment and slowing wage growth. Total inflation reached 4.4% in September and core inflation 3.9%, both in line with forecasts, while two-year inflation expectations remain around 3%.
Published on 2025-10-28

Chile Holds Interest Rate at 4.75%
The Central Bank of Chile left its benchmark interest rate unchanged at 4.75% in a unanimous decision during its August meeting, as expected. The board noted that the external environment has evolved largely as expected, though uncertainties remain, including the effects of US tariffs on trade flows and their potential impact on activity and inflation. Global markets expect the Federal Reserve to resume rate cuts this month, contributing to lower rates and broad stock market gains. Domestically, Chile’s GDP grew moderately in the second quarter, driven by investment and private consumption, while the labor market shows mixed signals with an 8.7% unemployment rate. Total inflation continues to decline, but underlying inflation remains above expectations, requiring close monitoring. The Central Bank emphasized that monetary policy will remain flexible, aiming to keep projected inflation at 3% over a two-year horizon.
Published on 2025-09-09

Chile Lowers Interest Rate by 25 bps
The Central Bank of Chile cut its benchmark interest rate by 25 basis points to 4.75% in a unanimous decision during its July meeting, citing persistent global uncertainty and mixed domestic signals. While the Israel-Iran conflict has ended, military tensions linger, and the US has introduced new tariffs, including on Brazil and copper, raising global trade concerns. Despite these developments, international financial markets have reacted mildly, and Chile’s economy continues to align with projections in the June Monetary Policy Report. Inflation came in lower than expected in June, with headline CPI falling 0.4% month-on-month, though core inflation remained flat. Domestically, consumption and investment have grown, but the labor market shows weak job creation and a rising unemployment rate. The Bank reaffirmed its commitment to guiding inflation toward the 3% target over a two-year horizon, signaling a flexible approach to future rate decisions.
Published on 2025-07-29

Chile Lowers Interest Rate by 25 bps
The Central Bank of Chile cut its benchmark interest rate by 25 basis points to 4.75% in a unanimous decision during its July meeting, citing persistent global uncertainty and mixed domestic signals. While the Israel-Iran conflict has ended, military tensions linger, and the US has introduced new tariffs, including on Brazil and copper, raising global trade concerns. Despite these developments, international financial markets have reacted mildly, and Chile’s economy continues to align with projections in the June Monetary Policy Report. Inflation came in lower than expected in June, with headline CPI falling 0.4% month-on-month, though core inflation remained flat. Domestically, consumption and investment have grown, but the labor market shows weak job creation and a rising unemployment rate. The Bank reaffirmed its commitment to guiding inflation toward the 3% target over a two-year horizon, signaling a flexible approach to future rate decisions.
Published on 2025-07-29

Chile Keeps Interest Rate on Hold
The Central Bank of Chile unanimously decided to keep the monetary policy rate steady at 5% at its June 2025 meeting. The decision came amid a complex global environment marked by persistent trade tensions, slowing US growth, and heightened geopolitical risks from the Middle East conflict. While financial markets have somewhat stabilized and copper prices have risen, oil prices surged following the recent escalation of war. Domestically, first-quarter economic activity exceeded expectations, driven by exports and resilient services, though the labor market remains weak with slow job creation and rising unemployment. Inflation has moderated, with headline and core CPI easing to 4.4% and 3.6% in May, and medium-term expectations anchored at 3%. The central bank noted that despite easing risks, global uncertainty may still disrupt inflation convergence. Looking ahead, policymakers signaled that if projections hold, the rate may gradually return to neutral range in the coming quarters.
Published on 2025-06-17

Chile Holds Interest Rate at 5%
The Central Bank of Chile unanimously kept its monetary policy interest rate unchanged at 5% during its April meeting, marking the fourth consecutive hold. The decision reflects heightened global uncertainty, particularly after the US announced new tariffs in early April, which have weighed on growth and inflation expectations. Global financial markets have seen increased volatility, with long-term US interest rates rising sharply and stock markets and currencies experiencing mixed movements. Despite this, Chile’s local financial conditions have improved, with declines in interest rates, a stronger peso, and gains in the stock market. Economic activity is gradually recovering, supported by export-related sectors and improving domestic demand. In March, headline inflation stood at 4.9%, while core inflation eased to 3.7%. The Central Bank reiterated its cautious and flexible approach to monetary policy, aiming to guide inflation toward its 3% target over the next two years.
Published on 2025-04-29

Chile Leaves Interest Rate at 5%
The Central Bank of Chile unanimously decided to keep the policy interest rate at 5% at its March meeting. The Board mentioned that global economic uncertainty has risen since the last meeting due to escalating geopolitical risks and new US tariff announcements, along with responses from affected countries. This has particularly impacted U.S. growth prospects and raised inflation expectations, leading the Federal Reserve to pause its rate-cutting cycle. Global financial markets have reacted differently, with U.S. equities declining while European and Chinese stocks have risen. The weakening U.S. dollar has boosted commodity prices, with copper rising 8% since the last meeting, while oil prices have dropped around 9% due to global growth concerns. In Chile, financial markets have followed broader emerging-market trends, with lower interest rates, a 7% appreciation of the peso, and a 6% gain in the IPSA index.
Published on 2025-03-21

Chile Holds Interest Rates at 5%, As Expected
The Central Bank of Chile unanimously decided to maintain the policy interest rate at 5% during its January meeting, reflecting persistent external and domestic challenges. Global financial markets remain volatile due to high uncertainty, including the U.S. government transition, with long-term interest rates rising and the dollar strengthening. Domestically, Q4 indicators slightly outperformed December central bank projections, with November’s economic activity growing 0.3% month-on-month, supported by gains in manufacturing and exports. However, weak job creation kept the unemployment rate at 8.5%, and annual wage growth remains elevated. Inflation reached 4.5% in December, with core CPI at 4.3%, driven by peso depreciation, rising labor costs, and electricity tariffs. Two-year inflation expectations remain anchored at 3%, but rising risks have led the Bank to reaffirm its cautious, flexible approach to ensure convergence within two years.
Published on 2025-01-28

Chile Cuts Interest Rates By 25 bps, As Expected
The Central Bank of Chile unanimously voted to reduce the policy interest rate by 25 bps to 5% at its December meeting, reflecting persistent external and domestic challenges. Globally, the U.S. economy remains resilient, while China’s weakness weighs on copper prices, now near $4/lb. Rising global uncertainty, long-term interest rates, and a stronger dollar have pressured Chile’s peso, which depreciated 6% since the last meeting. Domestically, Q3 activity aligned with forecasts but showed weak private consumption and investment, particularly outside the mining sector. Inflation reached 4.2% in November, above projections, due to higher costs from peso depreciation, rising wages, and electricity tariffs. Short-term inflation pressures may push rates toward 5% in H1 2025, though weaker domestic demand could ease pressures longer term. The Central Bank remains cautious, reaffirming its flexible approach to ensure inflation converges to 3% within two years.
Published on 2024-12-17

Chile Reduces Interest Rate By Another 25 bps
The Central Bank of Chile unanimously voted to reduce the policy interest rate by 25 bps to 5.25% at its October meeting. This decision comes amid global shifts, including the Federal Reserve's rate-cutting cycle and China's economic stimulus measures. Rising long-term interest rates and a depreciating peso reflect global market reactions, alongside fluctuating oil and copper prices driven by geopolitical tensions in the Middle East. Domestically, Chile’s economy showed mixed signals. August's Monthly Index of Economic Activity grew 2.3% year-on-year, with mining contributing positively, while the unemployment rate rose to 8.9%. Inflation dropped to 4.0% in September, slightly below forecasts, driven by volatile food prices, while core inflation remained steady at 3.8%. The Central Bank signaled further interest rate cuts may follow, reaffirming its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.
Published on 2024-10-17

Chile Lowers Interest Rate By 25 bps, As Expected
The Central Bank of Chile reduced its monetary policy interest rate by 25 basis points to 5.5% during its September meeting, with unanimous support from its members. Policymakers noted that recent global financial developments have been shaped by the U.S. Federal Reserve's signal to begin rate cuts, contrasting with more muted inflation declines elsewhere. Despite increased global market volatility, local financial conditions saw both short- and long-term interest rates decline, and the peso appreciated slightly. Domestically, economic activity lost momentum in Q2, with GDP contracting 0.6% quarter-on-quarter, while unemployment rose to 8.7%. Inflation in July exceeded expectations at 4.4%, driven by volatile components, though core inflation aligned with the 3% target over two years. The Board signaled that if the central scenario holds, the pace of rate cuts may accelerate, reaffirming its commitment to a 3% inflation target within the next two years.
Published on 2024-09-03

Chile Maintains Interest Rate at 5.75%, Defying Expectations
The Central Bank of Chile chose to maintain the monetary policy interest rate at 5.75% during its July 2024 meeting, contrary to expectations for a 25 basis point reduction, with unanimous support from its members. Policymakers observed that while both short- and long-term indexed interest rates in local financial markets had decreased, nominal rates remained stable. However, the peso depreciated due to lower copper prices, and credit demand continued to be weak. Additionally, economic activity fell short of earlier projections, highlighted by a 0.5% month-on-month decline in the non-mining Imacec in May. In June, inflation was recorded at 3.8%, with core inflation at 3.2%, and two-year inflation expectations hovering around 3%. The Board noted that if the central scenario materializes, further rate cuts are anticipated throughout the monetary policy horizon, reaffirming its commitment to achieving a 3% inflation target within the next two years.
Published on 2024-07-31

Chile Lowers Interest Rate By 25 bps
The Central Bank of Chile reduced the monetary policy interest rate by 25 basis points to 5.75% in April, as expected. Policymakers noted that local economic activity is rebounding, the labor market remains stable, with positive job creation and an 8.5% unemployment rate in the quarter ending in April. Business and household expectations are improving, although they remain pessimistic. In May, annual inflation was 3.4%, and the core CPI was 3.5%. Two-year inflation expectations are at 3% according to the Economic Expectations Survey and the Financial Operators Survey. The Council expects that, if the central scenario unfolds, most of this year's planned rate cuts will have been implemented by the first semester. The board expects a continued decrease in the monetary policy rate, taking into account the evolving macroeconomic scenario and its impact on inflation. The Council reaffirms its commitment to flexible monetary policy to achieve a 3% projected inflation rate within two years.
Published on 2024-06-18

Chile Reduces Policy Interest Rate by 75bps
The Central Bank of Chile cut its benchmark interest rate by 75 bps to 6.5% in April, in line with market expectations and acknowledging global inflation declines yet highlighting risks associated with cost increases. Market expectations indicate a potential delay in U.S. interest rate cuts, influencing Chile's financial market trends. Although economic data presents a mixed picture, with weaker demand and inflation surpassing expectations due to factors like exchange rate depreciation and external price hikes, ongoing improvements are evident. Despite these strides, the persistence of rising inflation and imported cost pressures necessitates continuous monitoring. Looking ahead, the Board envisions further rate reductions in line with the macroeconomic scenario outlined in the forthcoming MP Report.
Published on 2024-04-02

Chile Cuts Policy Interest Rate by 100bps
The Central Bank of Chile lowered its benchmark interest rate by 100 bps to 7.25% in January, in line with market expectations. The decision cited the ongoing decline in annual inflation to 3.9% in December from 4.8% the previous month, with two-year inflation expectations remaining at 3%. Officials noted that the local macroeconomic scenario aligned with forecasts. Globally, inflation continues to decrease, and monetary policy outlooks, especially in the U.S., have delayed the first Fed funds rate cut to late in the first half of 2024, impacting global financial conditions, with long-term interest rates increasing moderately in some major economies. The Council plans further rate cuts to achieve inflation convergence, with timing and magnitude dependent on evolving scenarios. Flexibility is assured in response to emerging risks or changing macroeconomic conditions.
Published on 2024-01-31

Chile Cuts Policy Interest Rate by 75bps
The Central Bank of Chile lowered its benchmark interest rate by 75 bps to 8.25% in its December meeting, surpassing market expectations for a 50 bps cut. The unanimous decision cited the ongoing decline in annual inflation to 4.8% in November from 5% the previous month, with two-year inflation expectations remaining at 3%. Officials noted that the local macroeconomic scenario aligned with forecasts. Globally, inflation continues to decrease, and monetary policy outlooks, especially in the U.S., indicate a shift toward relaxation, coinciding with improved global financial conditions, reversing the tightening observed in October. The Council plans further rate cuts to achieve inflation convergence, with timing and magnitude dependent on evolving scenarios. Flexibility is assured in response to emerging risks or changing macroeconomic conditions.
Published on 2023-12-19

Chile Cuts Policy Interest Rate to 9%
The Central Bank of Chile lowered its benchmark interest rate by 50 bps to 9% in its October meeting, compared to market expectations a cut of 75 bps. The decision was adopted unanimously noting the annual inflation has continued to decline to 5.1% in September from 5.3% in a month earlier. Also, inflation expectations in the two years remained at 3%. The officials also mentioned that the local macroeconomic scenario has evolved in line with forecasts. However, the international scenario shows a deterioration in financial conditions, combining real, financial factors and geopolitical risks. Given the effects of these global developments, the Council estimates that reducing the MPR by 50 basis points at this Meeting is consistent with the convergence of inflation to the 3% target. Additionally, due to growing tensions in global financial markets, the Board agreed to suspend the reserve replacement program and the gradual reduction of its forward position.
Published on 2023-10-26

Chile Lowers Policy Interest Rate by 75bps
The Central Bank of Chile cut its benchmark interest rate by 75 bps to 9.5% in its September meeting, compared to market expectations a cut of 100 bps. The decision was adopted unanimously noting inflation has continued to decline globally, while in several emerging economies the cycle of cuts has already begun or will soon begin. The board also mentioned that the macroeconomic scenario has evolved as anticipated, projecting that inflation will converge to the 3% target in the second half of 2024. The annual headline inflation fell to 6.5% in July from 7.6% in June and core inflation fell to 8.5% from 9.1%. The Board reaffirms its commitment to act with flexibility in the event that any of the internal or external risks materialize and macroeconomic conditions so require.
Published on 2023-09-05