The Central Bank of Chile lowered its benchmark interest rate by 50 bps to 2 percent at its September 2019 meeting, as widely expected. It is the second rate cut so far this year, bringing borrowing cost to the lowest since 2010. Policymakers said that the decision was based in the performance of the economy in the second quarter and its outlook and noted that the convergence of inflation to the target range will take longer than expected. The Committee added that an extension of monetary stimulus could be required, in light of the macroeconomic scenario evolution. Policymakers mentioned that the economy is projected to grow 2.6 percent for 2019, 3.1 percent for 2020 and 3.3 percent from 2021. Interest Rate in Chile averaged 4.59 percent from 1995 until 2019, reaching an all time high of 14 percent in September of 1998 and a record low of 0.50 percent in July of 2009.
Interest Rate in Chile is expected to be 2.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Chile to stand at 1.75 in 12 months time. In the long-term, the Chile Interest Rate is projected to trend around 2.00 percent in 2020, according to our econometric models.