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Chile Policy Interest Rate 5.75% (consensus 5.75%) in Jun-24

• 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.

Chile Policy Interest Rate 6.0% (consensus 6.0%) in May-24

• 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.

Chile Policy Interest Rate 6.5% (consensus 6.5%) in Apr-24

• The Central Bank of Chile reduced its MPR by 75 basis points to 6.5%, aligning with consensus expectations amid downward global inflation trends, yet noting risks from transportation and fuel costs.
• Domestically, the economy shows mixed signals with better-than-expected activity but subdued demand and investment, alongside an economy reflecting global financial market trends with adjustments in interest rates and currency depreciation.
• The Board anticipates further reductions in the MPR, considering the macroeconomic scenario and inflation trajectory, emphasizing the need for a flexible policy approach in response to transient inflationary pressures and external economic risks.

Chile CPI Inflation 0.6% m-o-m (consensus 0.2%) in Feb-24

- Chile's CPI inflation only slowed slightly to 0.6% month-on-month in February 2024, surpassing the consensus forecast of 0.2%.
- All but one inflation print in the past six months has been consistent with above-target inflation, which is worrying persistence.