Chile Monetary Policy July 2020


Chile: Central Bank leaves monetary policy rate at technical minimum and maintains unconventional stimulus in July

July 15, 2020

At its monetary policy meeting on 15 July the board of the Central Bank of Chile (BCCh) left the monetary policy rate unchanged at 0.50%, its lowest point since 2009. The decision, which was unanimous, came in line with analysts’ expectations and included the continuation of unconventional liquidity measures to support the economy.

Amid moderate inflation and the blow to economic activity from the Covid-19 pandemic, the Central Bank decided to leave the monetary policy rate at its technical minimum. The Bank also reaffirmed its unconventional asset purchase program, which will translate into asset purchases of up to USD 1.5 billion over the next four weeks.

Looking ahead, the Bank reiterated its intention to maintain the policy rate at 0.50% for as long as necessary and its readiness to intensify monetary stimulus through unconventional tools to further support the economy. Meanwhile, policymakers expect inflation to remain modest for an extended period of time amid depressed economic activity and elevated uncertainties stemming from possible outbreaks of the virus.

The next monetary policy meeting is scheduled for 1 September.

Focus Economics Consensus forecast panelists see the monetary policy rate ending 2020 at 0.49% and 2021 at 1.01%.

Author: Massimo Bassetti, Senior Economist

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Chile Monetary Policy Chart

Chile Monetary Policy July 20 20

Note: Year-on-year and month-on-month changes of industrial production index in %.
Source: French Statistics Institute (INSEE).

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