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.

Chile Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-05-09 10:00 PM Interest Rate Decision 3% 3% 3% 3.0%
2019-06-07 11:00 PM Interest Rate Decision 2.5% 3% 3% 3.0%
2019-07-18 10:00 PM Interest Rate Decision 2.5% 2.5% 2.5%
2019-09-03 10:00 PM Interest Rate Decision 2% 2.5% 2% 2.0%
2019-09-23 11:30 AM Monetary Policy Meeting Minutes
2019-10-23 09:00 PM Interest Rate Decision 2% 2.0%
2019-11-11 11:30 AM Monetary Policy Meeting Minutes

Chile Cuts Interest Rate By 50 Bps to 2%

The Central Bank of Chile cut its benchmark interest rate by 50 bps to 2 percent at its 3 September 2019 meeting. The unanimous decision was backed by a 10 bps decline in headline inflation (2.2% YoY in July) and triggered by a worsening of the external economic scenario. Policymakers noted that activity, exports and domestic demand indicators came below expectations since the last meeting. They also mentioned that growth expectations for 2019 were revised down to 2.6 percent. They underscored that the convergence of inflation to target will probably take longer than expected, which justifies further monetary stimulus.

Excerpts from the Statement of the Central Bank of Chile:

The main development since the previous Meeting has been the worsening of the external scenario. Especially significant has been the escalating trade conflict between the United States and China, with an impact on other economies that are integrated into value chains and financial markets. Global activity continued to slow in an important group of economies, where the weakening of manufacturing stood out, while services activity remains dynamic. The deterioration is deeper for global trade volumes, which virtually stagnated, and for expectations indicators. The trade conflict is compounded by the greater likelihood of a non-deal exit of the United Kingdom from the European Union, various geopolitical risks and a severe deterioration of the situation in Argentina. In this context, monetary policy has become more expansionary globally, but still financial markets continue to show high volatility and risk aversion. Thus, further declines in interest rates were observed in the fixed-income market, together with stock market relapses, depreciation of most currencies against the dollar and widespread falls in commodity prices. Inflationary figures remain contained in many economies around the world. 

In the second quarter, domestic activity and demand growth disappointed expectations. GDP growth was influenced by one-off supply-side factors and a fall in manufacturing. On the expenditure side, less progress was made in private consumption, although some of the one-off factors that affected GDP also had an impact on consumption growth. This, in a context in which consumer expectations have deteriorated from early in the year and private salaried employment shows less dynamism. Investment grew more than anticipated, thanks especially to its PRESS RELEASE* [INF*RES*AS] construction and other works component, offsetting a lower-than-expected expansion of machinery and equipment. Exports performed worse than expected. In this scenario, economic growth expectations have been adjusted downwards. The August Economic Expectations Survey (EES) anticipates GDP growth of 2.6% for 2019, 3.1% for 2020, and 3.3% for 2021.

The Board’s decision considers that the economy’s performance of the second quarter and its outlook indicate that inflation will take longer to converge to the target, calling for a stronger monetary stimulus. It also estimates that further stimulus might be required, which will be evaluated in the upcoming meetings in light of the evolution of the macroeconomic scenario. With that, the Board reiterates that it will conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.

Mario |
9/3/2019 10:10:43 PM

Chile Money Last Previous Highest Lowest Unit
Interest Rate 2.00 2.50 14.00 0.50 percent [+]
Interbank Rate 2.12 2.12 7.45 0.06 percent [+]
Money Supply M1 37029.47 36907.70 37029.47 81.57 CLP Billion [+]
Money Supply M2 142807.15 140974.83 142807.15 753.65 CLP Billion [+]
Money Supply M3 246101.70 247012.17 247012.17 1231.77 CLP Billion [+]
Foreign Exchange Reserves 39525.50 40233.30 42302.70 1998.90 USD Million [+]
Banks Balance Sheet 149867.00 150202.00 150202.00 19067.00 CLP Million [+]
Loans to Private Sector 105116.00 104199.00 105116.00 15521.00 CLP Billion [+]
Deposit Interest Rate 2.70 2.90 48.68 1.75 percent [+]
Private Debt to GDP 189.10 196.80 198.70 137.60 percent [+]
Central Bank Balance Sheet 27623.00 26831.00 28048.00 10730.92 CLP Million [+]

Chile Interest Rate

In Chile, interest rate decisions are taken by The Central Bank of Chile (Banco Central de Chile). The official interest rate is monetary policy interest rate (PDBC Pagarés Descontables del Banco Central) which is overnight interbank interest rate. This page provides - Chile Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Chile Interest Rate - actual data, historical chart and calendar of releases - was last updated on September of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.00 2.50 14.00 0.50 1995 - 2019 percent Daily

Country Last Previous
Argentina 83.21 Sep/19
Turkey 16.50 Sep/19
Mexico 8.00 Aug/19
Russia 7.00 Sep/19
South Africa 6.50 Sep/19
Brazil 5.50 Sep/19
India 5.40 Aug/19
Indonesia 5.25 Sep/19
China 4.20 Sep/19
Saudi Arabia 2.50 Sep/19
United States 2.00 Sep/19
Canada 1.75 Sep/19
Singapore 1.74 Aug/19
South Korea 1.50 Aug/19
Australia 1.00 Sep/19
United Kingdom 0.75 Sep/19
Euro Area 0.00 Sep/19
France 0.00 Sep/19
Germany 0.00 Sep/19
Italy 0.00 Sep/19
Netherlands 0.00 Sep/19
Spain 0.00 Sep/19
Japan -0.10 Sep/19
Switzerland -0.75 Sep/19