The Board of the Central Bank of Chile held the monetary policy rate at 4.5% in July 2026 by unanimous vote, citing a still highly uncertain macroeconomic backdrop in which Middle East tensions and oil-price volatility have lifted near-term inflation risks even as domestic activity has undershot the June Monetary Policy Report. The rate has been unchanged at 4.5% since the 25 bp cut in December 2025, after a 25 bp cut to 4.75% in July 2025. In Chile, overall activity fell 0.9% y/y in May while non-mining activity rose 0.7%, both below June projections, and the unemployment rate increased amid weak job creation and faster hourly labor costs. June CPI inflation rose to 4.3% y/y, above the June report and market expectations, while core inflation reached 3.4%; short-term inflation expectations increased with oil prices, but two-year expectations in both the Economic Expectations Survey and Financial Traders Survey remained at 3%, the central bank’s objective over that horizon. Externally, renewed attacks after a June ceasefire agreement between the United States and Iran pushed oil back toward USD100 a barrel before some moderation, while higher inflation expectations and the Federal Reserve’s tone drove up global rates and weakened most currencies, including the Chilean peso; copper traded around USD6.3 a pound. The Central Bank of Chile said policy will continue to be assessed meeting by meeting and that it stands ready to adjust as needed to ensure projected inflation returns
Central Bank of Chile2026-07-28
Central Bank of Chile Holds Monetary Policy Rate at 4.5%
The Central Bank of Chile unanimously held the monetary policy rate at 4.5% in July 2026, citing a highly uncertain backdrop in which Middle East tensions and oil-price volatility have raised near-term inflation risks even as domestic activity undershot the June Monetary Policy Report. June inflation rose to 4.3% year on year and short-term expectations increased, but two-year expectations remained at 3%, and the bank said it will assess policy meeting by meeting to ensure inflation returns to 3% over that horizon.