Chile Monetary Policy


Central Bank keeps policy rate unchanged

At its 19 November meeting, the Central Bank decided to keep the policy rate at 3.00%, which met market expectations. This is the first meeting in which the Bank has kept the policy rate unchanged following two consecutive meetings in which it cut its benchmark interest rate in an effort to support economic growth.

On the international front, the Bank stated that the growth outlook in the United States is positive, while in the Eurozone and Japan recent economic data show slower growth and low levels of inflation. Regarding commodity prices, there has been a further drop in oil prices, while copper prices have been relatively stable.

Local economic news confirm that the economy is underperforming due to weak output and demand. Regarding price developments, the Bank went on to say that annual inflation was higher than expected in October, reflecting the impact of the monetary stimulus. According to the Bank, “the most likely scenario assumes that inflation will stay above the upper bound of the tolerance margin still for some months.”

LatinFocus Consensus Forecast panelists see the policy rate at 2.98% at the end of the year. Panelists expect the policy rate to end next year at 3.13%.

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Chile Monetary Policy Chart

Chile Monetary Policy November 2014

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

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