Chile Monetary Policy June 2021

Chile

Chile: Central Bank stands pat in June; strikes more hawkish tone

June 9, 2021

At its 8–9 June meeting, 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, matching market analysts’ expectations.

Although both headline and core inflation are averaging around 3.5% and the Bank noted the economy was performing better than previously expected, it decided to keep rates steady to support the recovery. However, it did announce it would taper off some unconventional liquidity measures, as scheduled.

Moving forward, the Bank stuck a more hawkish tone, stating that strengthening consumer spending represents a “change for the macroeconomic scenario of the coming months, which makes it necessary to recalibrate the expansiveness of monetary policy going forward”, therefore suggesting some tightening could be on the cards.

The next monetary policy meeting is scheduled for 13–14 July.

FocusEconomics Consensus Forecast panelists see the monetary policy rate ending 2021 at 0.64% and 2022 at 1.65%.


Author: Massimo Bassetti, Senior Economist

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Chile Monetary Policy Chart


Chile Monetary Policy June 2021

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


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