The Central Bank of Chile unanimously held its monetary policy interest rate at 4.5%, balancing weaker-than-projected domestic activity against above-target headline inflation and heightened external uncertainty. After holding the rate at 4.75% in September and October 2025 and cutting it by 25 basis points in December, the central bank has maintained 4.5% since January 2026. Economic activity remained weak in the second quarter and early third quarter as domestic demand slowed, while job losses and higher unemployment underscored labor-market softness. Annual headline inflation rose to 4.1% in August due to volatile components, while core inflation was 3.3% and two-year expectations remained at the 3% target. The U.S. dollar depreciated globally, while renewed escalation in the United States-Iran conflict pushed oil close to USD 100 per barrel, adding to inflation risks even as global activity remained resilient, particularly in economies linked to artificial intelligence production. The Board will assess the rate path meeting by meeting and reiterated its commitment to ensuring projected inflation reaches 3% over a two-year horizon.
2026-09-09Central Bank of Chile
Central Bank of Chile Holds Policy Rate at 4.5%
The Central Bank of Chile unanimously held its monetary policy interest rate at 4.5%, balancing weaker domestic activity against 4.1% headline inflation and heightened external uncertainty. It will assess rates meeting by meeting to ensure projected inflation reaches the 3% target over two years.