January 31, 2024

Chile Policy Interest Rate 7.25% (consensus 7.25%) in Jan-24

  • The Central Bank of Chile cut the MPR by 100 basis points to 7.25%, matching consensus forecasts, amid declining global inflation, U.S. economic resilience, and regional geopolitical tensions impacting financial markets.
  • Domestically, the decision reflects a response to rapid declines in inflation rates, modest economic growth, and continued restrictive credit conditions, coupled with a depreciating peso and stable stock market performance.
  • Looking forward, the Council anticipates an earlier convergence to the 3% inflation target and plans to adjust the MPR towards a neutral stance by the latter half of 2024, maintaining flexibility to respond to evolving macroeconomic conditions and potential risks.

January 08, 2024

Chile CPI Inflation -0.5% m-o-m (consensus -0.1%) in Dec-23

- Chile's CPI inflation rate experienced a significant decline of 0.5% on a month-on-month basis in December 2023, far below the market consensus of -0.1%.
- The current rate is notably below average and led by core weakness, indicating excessive disinflationary pressure that supports ongoing policy loosening.

December 19, 2023

Chile Policy Interest Rate 8.25% (consensus 8.5%) in Dec-23

  • The Central Bank of Chile unexpectedly cut the MPR by 75 basis points to 8.25%, influenced by improved global financial conditions and a downward trajectory in inflation, both domestically and in key economies like the U.S.
  • Domestically, slight GDP growth, sluggish labour market performance, and continued pessimistic sentiments among households and firms have shaped the decision, with inflation rates showing a consistent decrease.
  • Future policy decisions will likely involve further MPR cuts, guided by the evolving macroeconomic scenario and inflation trends, with a commitment to flexibility in response to any emerging internal or external risks.

December 07, 2023

Chile CPI Inflation 0.7% m-o-m (consensus 0.2%) in Nov-23

- Chile's CPI inflation in November 2023 surpassed market expectations and recorded the highest growth since March 2023.
- The current reading exceeded the one-year average by 0.32 percentage points, indicating a worrying upward trend in inflationary pressures.