Central Bank of Chile leaves rates unchanged in June

Latest bank decision: At its meeting on 17 June, 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, strong wage growth, 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 suggested it was likely to cut rates in the coming quarters. 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: “While we anticipate the cycle to resume in July, the risk is that swings in the external backdrop delay cuts until September. We foresee the cycle concluding at 4% early in 2026.” Goldman Sachs’ Sergio Armella said: “In our assessment, recent developments in the Middle East prompted the MPC to adopt a more conservative stance. […] Given our forecasts of a benign inflation outlook going forward and considering the guidance provided by the MPC, we maintain our forecast of three cuts in 2025 and a terminal rate of 4.25%.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Chilean interest rate projections for the next ten years from a panel of 33 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Chilean interest rate.

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