Central Bank of Chile Holds Monetary Policy Interest Rate at 4.5%

The Central Bank of Chile held its monetary policy interest rate at 4.5% in June 2026 by unanimous vote, as it weighed a rapid rise in headline inflation from the Middle East oil shock against weaker-than-expected domestic activity, while judging that the balance of inflation risks had been shifting gradually toward equilibrium but that uncertainty remained unusually high. At home, economic activity contracted in the first quarter and undershot the March IPoM, largely because of weak natural resource sectors, while private consumption remained dynamic, gross capital formation weakened and unemployment rose amid soft job creation. Headline CPI inflation accelerated to 3.9% year on year in May, driven by fuel prices, while core inflation was little changed at 3.2%, and the Economic Expectations Survey placed two-year inflation expectations at 3%. Externally, oil recently fell to slightly below USD80 per barrel on average for WTI and Brent after a new US-Iran ceasefire agreement, Chilean financial markets reacted positively and the USD depreciated globally, while copper remained above USD6 per pound. The central bank said the regional conflict remained unresolved and global oil supply had not normalized, even as global activity stayed resilient and central banks maintained a cautious stance. It said the future path of the policy rate would be assessed meeting by meeting and reiterated that it would take whatever decisions were necessary to bring projected inflation to 3% over a