Chile Monetary Policy June 2022


Chile: Central Bank hikes rates further in June

June 7, 2022

At its 7 June meeting, the board of the Central Bank of Chile (CBC) decided to hike the monetary policy rate by 75 basis points to 9.00%, taking total tightening this year to 500 basis points.

The Bank’s decision was driven by a desire to rein in inflation and inflation expectations. Inflation in April once again overshot the Bank’s estimations and rose further above its 3.0% target, with core price pressures also intensifying. Moreover, the Bank highlighted that market inflation expectations remained above the target over a two-year horizon. Moreover, in its accompanying monetary policy report, the CBC radically revised up its inflation forecasts for 2022, and now sees inflation averaging 10.8% for the year. In addition, the Bank judged that economic activity was easing at a softer rate than expected, providing the room to hike.

In its communiqué, the Central Bank stated that further rate hikes of a smaller magnitude would be necessary to tame inflation. This is in line with our panelists’ forecast for further tightening later this year.  

Our panelists are taking the Bank’s latest move into account, with a new Consensus to be published in mid-June.

Author:, Economist

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Chile Monetary Policy Chart

Chile Monetary Policy June 2022 0

Note: Policy rate in %.
Source: Central Bank of Chile.

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