Interest Rate in Chile
Chile - Interest Rate
Central Bank holds rate steady in July
At its 18 July monetary policy meeting, the board of the Central Bank of Chile (BCCh) decided to keep the key policy rate unchanged at 2.50%, in line with analysts’ expectations and on the heels of an abrupt 50 basis points cut in early June. Notably, one member out of the five-member board opposed the decision, favoring instead an additional 25-basis-point cut.
Although inflation remained weak in the second quarter on a surprising drop in prices for services, policymakers were wary to hasten another rate cut and instead opted for a wait-and-see approach. Lackluster mining activity and an unfavorable external backdrop in Q2 took a toll on domestic demand, quelling prices pressures in the process.
Looking ahead, however, the board decisively stated it would cut the rate if sustained downside risks to inflation, stemming from sluggish service price inflation and subdued domestic demand, persist. Moreover, policymakers reiterated the Bank’s commitment to a flexible monetary policy stance ahead, in order to reach the 3.0% inflation target in a two-year horizon.
The next monetary policy meeting is scheduled for 3 September.
The BCCh sees inflation ending 2019 at 2.8% and 2020 at 2.9%. LatinFocus Consensus Forecast panelists are still assessing the Bank’s decision. The current consensus is for the policy rate to increase gradually going forward, ending 2019 at 2.32% and 2020 at 2.67%.
Chile - Interest Rate Data
|Policy Interest Rate (%)||4.50||3.00||3.50||3.50||2.50|
5 years of economic forecasts for more than 30 economic indicators.
Chile Interest Rate Chart
|Bond Yield||2.88||-0.44 %||Jul 31|
|Exchange Rate||703.6||0.05 %||Jul 31|
|Stock Market||25,281||-0.67 %||Jul 31|
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August 19, 2019
The economy grew 1.9% year-on-year in the second quarter, slightly above the previous quarter’s 1.6% outturn, which had marked the slowest expansion since Q2 2017.
August 8, 2019
Consumer prices rose 0.2% month-on-month in July, after a neutral print in June.
August 5, 2019
The Adimark GfK consumer confidence index rose to 40.3 points in July, from 37.8 points in June which had marked the lowest print since March 2017.
August 5, 2019
In June, the IMACEC economic activity index rose 1.3% year-on-year, decelerating from May’s 2.3% result.
August 1, 2019
The business confidence index (IMCE), published by ICARE and the Adolfo Ibáñez University, slightly improved in July, landing at 50.4 points (June: 50.2 points), marginally above the crucial 50-point threshold that separates optimism from pessimism among Chilean businesses.