Chile Holds Interest Rate Steady

The Central Bank of Chile kept its policy rate unchanged at 4.5% in a unanimous decision in April 2026, citing persistent global uncertainty driven by the ongoing Middle East conflict. While oil futures still point to some easing, risks remain that energy and commodity prices stay elevated, fueling inflation risks. Still, equities recovered and currencies strengthened, while copper prices climbed around $6 per pound, above earlier projections. Domestically, activity softened, with non-mining output contracting 0.3% year-on-year in February due to supply disruptions. Consumption remained broadly stable, but investment slowed more than expected. The labor market saw little change, with steady unemployment and limited job creation. Inflation rose slightly above forecasts, with headline at 2.8% and core at 3.4%, while short-term expectations increased. Still, medium-term expectations remain anchored near the 3% target, as the central bank signaled a cautious, data-dependent approach ahead.

The Central Bank of Chile maintained its policy rate at 4.5% in a unanimous March decision, citing a significant increase in uncertainty regarding the global economic outlook due to the war in the Middle East. The board noted that an initial external boost early in the year has been overshadowed by rising oil prices around $100 per barrel and tighter global financial conditions, while copper prices have decreased from their recent peaks despite remaining above previous IPoM forecasts. Domestic activity closed 2025 with 2.5% growth, though January Imacec performance was lower than expected due to supply factors in mining and agribusiness while private consumption and investment remained dynamic. The labour market showed little change with the unemployment rate steady and job creation remaining limited. Inflation showed a reduction with headline inflation at 2.4% and core inflation at 3.3% in February, though short-term expectations have risen relevantly due to fuel prices.

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.