Skyline in Chile

Chile Monetary Policy January 2018

Chile: Central Bank resumes tightening cycle in January

At its 30 January monetary policy meeting, the board of the Central Bank of Chile (BCCh) voted unanimously to hike the key policy rate from 2.75% to 3.00%. The decision came in line with analysts’ expectations and was driven by upbeat domestic activity in the fourth quarter.

Although inflation closed the year further below the midpoint of the Bank’s 2.0%–4.0% target rate (December: 2.6%), an acceleration in non-mining activity prompted the board to resume its tightening cycle after a pause in December. The BCCh remarked that regained dynamism in investment-related sectors, particularly in capital goods imports and construction, allows for a “gradual withdrawal” of monetary stimulus. The board’s tightening came against the backdrop of a relaxation in monetary policy in the world’s biggest economies.

In its communiqué, the BCCh signaled that further policy tightening was still on the cards, albeit at a more gradual pace as the economy adjusts to a more volatile global economy. The board will pay heed to changes in monetary policy abroad, as it moves towards a neutral policy that encourages inflation to converge at the target rate of 3.0%. Analysts expect the board to keep rates unchanged at the next monetary policy meeting scheduled for 29 March.

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 X Download Fullscreen