The Central Bank of Chile left its benchmark interest rate unchanged at 2.75 percent on 4 December 2018, matching market expectations. The decision was unanimous. Policymakers mentioned that weaker global and domestic growth is expected ahead and underscored that the peso and equities remain highly volatile. Nonetheless, a hawkish stance prevailed, as the minutes suggested higher rates to normalize the previous easing cycle. They also noted that while oil prices have plunged recently, prices of most commodities remain stable. As for consumer prices, policymakers underscored that inflation expectations declined since the last meeting. The annual inflation rate in Chile eased to 2.9 percent in October 2018 from 3.1 percent in the previous month. Interest Rate in Chile averaged 4.65 percent from 1995 until 2018, 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 2.75 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 3.00 in 12 months time. In the long-term, the Chile Interest Rate is projected to trend around 3.25 percent in 2020, according to our econometric models.