The Central Bank of Chile’s Board unanimously held its policy interest rate at 4.5% amid significantly higher inflation risks and a weaker near-term growth outlook, extending the pause following a 25-basis-point cut from 4.75% in December 2025. Annual headline and core inflation stood at 4.1% and 3.2%, respectively, in September, in line with forecasts, but inflation projections for the coming months rose significantly above the September Monetary Policy Report’s baseline. August economic activity undershot forecasts mainly because of mining, while third-quarter indicators showed continued weakness in consumption and particularly investment. The Board warned that economic weakness could prove more persistent than expected. The peso depreciated as local financial markets mirrored tighter international conditions. Escalating Middle East tensions increased energy costs, while an unusually intense El Niño began pushing up international food prices, adding to global inflation concerns. The Board will assess policy meeting by meeting, paying particular attention to stronger or more persistent transmission of these shocks to inflation, and reaffirmed its commitment to bringing projected inflation to 3% over a two-year horizon.
Central Bank of Chile Unanimously Holds Policy Rate at 4.5%
The Central Bank of Chile’s Board unanimously held its policy interest rate at 4.5% amid significantly higher inflation risks and a weaker near-term growth outlook. It will assess policy meeting by meeting, monitoring inflationary shocks while reaffirming its commitment to bringing projected inflation to 3% over a two-year horizon.