Chile Monetary Policy


Central Bank keeps policy rate unchanged

The Central Bank of Chile decided to keep the policy rate unchanged at 3.00% at its meeting on 14 July. The decision was in line with market expectations and marked the ninth consecutive meeting in which the Bank has kept the policy rate unchanged.

As for international developments, the Bank pointed out that global financial markets have been volatile, mainly owing to turmoil in China and Greece, but that volatility had moderated more recently and that prices of risky assets recovered in recent days. The Bank added that the U.S. dollar has appreciated globally and that commodity prices, especially of copper and oil, have fallen.

In the domestic arena, according to the Bank, June’s inflation had surprised to the upside and again exceeded 4.0%. The Bank said that market expectations for this year’s inflation increased compared to last month, while they remained unchanged for 2016, and noted that, “the evolution of inflation will continue to be monitored with special attention.” The Bank added that Chilean output and demand had undershot the Bank’s expectations, and that it now projects slower private consumption growth for both this year and next. In addition, the Bank noted that confidence indicators and job creation were lackluster, and that the Chilean peso had continued to weaken. The next monetary policy meeting is scheduled for 13 August.

LatinFocus Consensus Forecast panelists see the policy rate at 3.00% at the end of 2015. Panelists expect the policy rate to end 2016 at 3.61%.

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Chile Monetary Policy Chart

Chile Monetary Policy July 2015

Note: Monetary Policy Rate (TMP, Tasa de Politica Monetaria) in %
Source: Chile Central Bank (BCC)

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