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Chile: 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%.”
