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Chile's Central Bank Holds Policy Rate at 4.5% for Sixth Consecutive Meeting
Chile's central bank held its key policy rate at 4.5% on the 8th, marking the sixth consecutive meeting with no change. The decision was unanimous, as analysts had expected. Amid an unusually uncertain economic outlook, the board explained that it is considering scenarios where unexpected inflation movements could necessitate adjustments to monetary policy. In August, inflation stood at 4.1% year-on-year, accelerating from 3.5% in July and moving outside the central bank's target range of 3% plus or minus one percentage point. Last month, the central bank reported that GDP contracted by 0.2% year-on-year in the second quarter, falling short of expectations as lower copper production weighed on the mining sector, a core industry. It also noted that while the domestic economy is expected to accelerate toward 2027, there is a risk that the current downturn could persist longer than previously anticipated. The future path of interest rates will be assessed on a meeting-by-meeting basis.