Heteronomics Archive

September 03, 2024

Chile Policy Interest Rate 5.5% (consensus 5.5%) in Sep-24

The Central Bank of Chile cut the MPR by 25 basis points to 5.5% in response to slowing economic activity and inflation dynamics, aligning with market expectations again after surprisingly holding the rate steady in July.
Chile’s financial market mirrored global trends, with falling short- and long-term interest rates and a modest appreciation of the peso. However, credit growth remains weak, especially in the commercial sector.
Future MPR cuts will likely proceed faster than previously projected, contingent on macroeconomic conditions and inflationary pressures, with the Bank committed to ensuring inflation remains on track to reach 3% over the two-year horizon.

July 31, 2024

The Central Bank of Chile kept the MPR unchanged at 5.75%, defying expectations of a 25 basis point cut due to a cautious assessment of global inflation trends and mixed signals from major economies like the US and China.
Domestically, financial markets mirrored global trends with lower indexed rates, a depreciated peso, and weak credit conditions. Economic activity underperformed relative to projections, and investment expectations showed signs of improvement.
The Board anticipates further MPR reductions contingent on macroeconomic developments, with a commitment to maintaining policy flexibility to ensure inflation remains aligned with the 3% target over a two-year horizon.

June 19, 2024

In response to moderating global inflation and mixed signals from the US economy, the Central Bank of Chile unsurprisingly reduced the MPR by 25 basis points to 5.75%.
Chile's financial market mirrored global trends with slight fluctuations in long-term rates, a 3% depreciation of the peso, and stable stock prices, while domestic economic activity showed signs of recovering along its growth path.
Future MPR cuts are anticipated, with the pace and magnitude depending on macroeconomic developments and their implications for inflation, ensuring a flexible approach to maintaining the 3% inflation target over a two-year horizon.

May 23, 2024

The Central Bank of Chile reduced its policy rate by 50 basis points to 6.0%, matching consensus expectations, as global inflation moderates and financial markets adjust to evolving Federal Reserve policies.
Chile's financial market mirrored global trends, with increases in long-term rates and stock prices, a significant appreciation of the peso due to rising copper prices, and mixed credit conditions reflecting both the MPR cuts and persistent high mortgage rates.
Future interest rate cuts are anticipated, contingent on the macroeconomic scenario and inflation trends, with the Board committed to maintaining flexibility to ensure projected inflation aligns with the 3% target over a two-year horizon.