Chile Monetary Policy December 2020


Chile: Central Bank keeps monetary policy unchanged in December

December 9, 2020

At its monetary policy meeting on 6–7 December, the board of the Central Bank of Chile unanimously decided to keep the monetary policy rate unchanged at 0.50%, its lowest point since 2009. The decision matched market analysts’ expectations and included the continuation of unconventional liquidity measures to support the economy.

Moderating inflationary pressures in October-November and an uneven economic recovery following Q3’s rebound were behind the Central Bank’s decision to maintain its ultra-loose monetary policy stance. On top of that, the Bank’s continuation of its unconventional asset purchase program should help the recovery ahead.

Moving forward, the Bank reaffirmed its intention to maintain the policy rate at 0.50% for most of the two-year monetary policy horizon and stated that it will maintain the total stock of banking bonds over the next six months, reinvesting the coupons as they mature.

The next monetary policy meeting is scheduled for 26–27 January.

Focus Economics Consensus forecast panelists see the monetary policy rate ending 2021 at 0.64% and 2022 at 1.48%.

Author: Massimo Bassetti, Senior Economist

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Chile Monetary Policy Chart

Chile Monetary Policy December 20 20

Note: Year-on-year and month-on-month changes of industrial production index in %.
Source: Central Bank of Chile.

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