Chile Monetary Policy October 2020


Chile: Central Bank stands pat in October

October 16, 2020

At its monetary policy meeting on 14-15 October, 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 was in line with market analysts’ expectations and included the continuation of unconventional liquidity measures to support the economy.

Contained inflationary pressures in Q3 and a patchy economic recovery following the blow dealt by the Covid-19 pandemic earlier in the year 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.

Looking ahead, the Bank reiterated its intention to maintain the policy rate at 0.50% for much of the two-year monetary policy horizon and confirmed that it stood ready to intensify monetary stimulus with additional tools if necessary.

The next monetary policy meeting is scheduled for 6–7 December.

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 October 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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