Chile Monetary Policy


Central Bank keeps rates on hold for over 1.5 years

At its 13 August meeting, the Central Bank left the policy rate unchanged at 5.00%, a decision that was expected by the market. The last policy rate change took place in January 2012, with a cut of 25 basis points.

In its statement, the Bank noted that international financial conditions have improved somewhat in the last month, leading to lower risk premiums for corporate and sovereign bonds. The Central Bank acknowledged that second quarter global economic performance was below forecast, with growth expectations for emerging economies deteriorating further and data from China pointing to a stabilization in its growth rate.

On the domestic front, monetary authorities stated that the economy continues to show a deceleration in output and demand. Meanwhile, regarding price developments, the Bank stated that headline inflation fell to a rate within the tolerance range as forecast. The Board sees headline and core inflation remaining in line with its 3.0% target on the policy horizon. The next policy meeting is scheduled for 12 September.

LatinFocus Consensus Forecast panellists see the policy rate at 5.01% by the end of the year. Panellists expect the policy rate to end next year at 5.06%.


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Chile Monetary Policy Chart

Chile Monetary Policy August 2013

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

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