Skyline in Chile

Chile Monetary Policy May 2020

Chile: Central Bank leaves monetary policy rate at technical minimum in May

At its monetary policy meeting on 6 May, 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 followed a 50-basis-point cut in their previous meeting on 31 March.

The decision to leave the monetary policy rate at its technical minimum reflected the need to minimize the economic fallout posed by the Covid-19 pandemic. Inflation logged 3.7% in March (February: 3.9%), remaining within the 2.0%–4.0% target band and looks set to fall ahead as a result of shrinking economic activity and plummeting energy prices. Meanwhile, the unconventional liquidity measures deployed in March have so far helped commercial lenders meet the jump in demand for credit, particularly by large corporates, at relatively low interest rates.

Going forward, the Bank expects to maintain the policy rate at 0.50% for a long period of time in order for inflation to converge to the midpoint of the target band in the next two years. Furthermore, the Bank will evaluate additional unconventional tools to further boost liquidity and maintain financial stability, if required.

The next monetary policy meeting is scheduled for 16 June.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest