Central Bank of Chile leaves rates unchanged in April

Latest bank decision: At its meeting on 29 April, the Central Bank of Chile decided to maintain the monetary policy interest rate at 5.00%.

Monetary policy drivers: The Central Bank likely decided to prolong the pause in its easing cycle—which saw the policy fall by 625 basis points from mid-2023 to late 2024—in light of elevated global economic uncertainty, a robust recent economic performance, and domestic inflation which is above the Bank’s 2.0–4.0% target range.

Policy outlook: The Central Bank provided no explicit forward guidance on the future direction of interest rates. Most of our panelists see room for mild monetary easing by end-2025, given inflation should fall later in the year as the economy metabolizes past electricity tariff hikes. However, some panelists see rates on hold throughout this year.

Panelist insight: Itaú Unibanco analysts commented on the outlook: “[The] decision is in line with our view of rates-on-hold as further information is accumulated, before likely lowering the MPR during 2H25 as the both the global economy slows and ex-US inflation pressures show signs of fading.” Goldman Sachs’ Sergio Armella said: “We expect the central bank to cut its benchmark rate three times in the second half of 2025 to 4.25%. That said, we remain sympathetic to the possibility that the central bank moves to cut its policy rate earlier (e.g., June instead of July in our baseline) and towards a terminal rate of 4.0%, in line with the central bank’s neutral estimate.”

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