The Central Bank of Chile left its benchmark interest rate unchanged at 2.75 percent on 4 December 2018, matching market expectations. The decision was unanimous. Policymakers mentioned that weaker global and domestic growth is expected ahead and underscored that the peso and equities remain highly volatile. Nonetheless, a hawkish stance prevailed, as the minutes suggested higher rates to normalize the previous easing cycle. They also noted that while oil prices have plunged recently, prices of most commodities remain stable. As for consumer prices, policymakers underscored that inflation expectations declined since the last meeting. The annual inflation rate in Chile eased to 2.9 percent in October 2018 from 3.1 percent in the previous month. Interest Rate in Chile averaged 4.65 percent from 1995 until 2018, reaching an all time high of 14 percent in September of 1998 and a record low of 0.50 percent in July of 2009.

Interest Rate in Chile is expected to be 3.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Chile to stand at 3.25 in 12 months time. In the long-term, the Chile Interest Rate is projected to trend around 3.50 percent in 2020, according to our econometric models.

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Calendar GMT Actual Previous Consensus TEForecast
2018-07-24 10:00 PM Interest Rate Decision 2.5% 2.5% 2.5% 2.50%
2018-09-04 09:00 PM Interest Rate Decision 2.5% 2.5% 2.5% 2.50%
2018-10-18 09:00 PM Interest Rate Decision 2.75% 2.5% 2.75% 2.75%
2018-12-04 09:00 PM Interest Rate Decision 2.75% 2.75% 2.75% 2.75%
2019-01-30 09:00 PM Interest Rate Decision 2.75% 3.0%
2019-02-14 11:30 AM Monetary Policy Meeting Minutes
2019-03-29 09:00 PM Interest Rate Decision 3.0%



Chile Holds Interest Rate at 2.75%

The Central Bank of Chile left its benchmark interest rate unchanged at 2.75 percent on 4 December 2018, matching market expectations. The decision was unanimous. Policymakers mentioned that weaker global and domestic growth is expected ahead and underscored that the peso and equities remain highly volatile. Nonetheless, a hawkish stance prevailed, as the minutes suggested higher rates to normalize the previous easing cycle. They also noted that while oil prices have plunged recently, prices of most commodities remain stable. As for consumer prices, policymakers underscored that inflation expectations declined since the last meeting. The annual inflation rate in Chile eased to 2.9 percent in October 2018 from 3.1 percent in the previous month.

Minutes from the Central Bank of Chile:

Externally, the data continues to confirm that global growth is moving to a stage of lower expansion than in previous years. Since the previous Meeting, less auspicious activity figures have been noted in the Eurozone and China, a downward adjustment in the prices of risky assets in developed markets and a market perception that the process of monetary normalization in the United States will be more limited next year. Also worth noting is the significant drop in the price of oil, which reduces some short-term inflationary pressures, in a context where the other commodity prices show no big changes. The Brexit is nearing definition, while the trade conflict between the US and China seem to have opened some formal room for negotiating.

The Chilean peso and stock market continued to fluctuate significantly in recent weeks, while longer-term interest rates decreased in line with events in the developed markets. Risk indicators posted minor changes. The credit market continues to be characterized by low interest rates and higher growth in commercial and consumer loans.

Third-quarter 2018 national accounts showed a slowdown in activity beyond expectations, caused mostly by mining- and manufacturing- specific factors. In the latter case, the calendar effect took a toll on activity in September, which was fully undone October according to sectoral indicators. On the expenditure side, the data continues to point to significant momentum from investment and somewhat slower from consumption, although October’s sectoral retail data suggests a strengthening of the latter. The revision to remuneration indexes by the INE and the consideration of the effect of immigration on the behavior of employment confirm the vision of a labor market that evolves in line with the growth pace observed since mid-2017. For the period 2018-2020, the market outlook (EES) points to an annual GDP expansion of 4% this year and 3.5% in 2019 and 2020.

October’s inflation (0.4%) was in line with forecasts, so annual CPI inflation decreased to 2.9% and CPIEFE inflation remained at 2.1%. The prices that are more sensitive to the activity gap, such as non-regulated utility rates in the CPIEFE, continue to accelerate steadily. At shorter terms, private inflation expectations have fallen in line with the lower international prices of oil and fuels, while at two years they remain around 3%.

The Board’s decision considered that the analysis contained in the December Monetary Policy Report, and the data available at the statistical close, confirm that the evolution of macroeconomic conditions make it necessary to reduce the monetary stimulus, a process that will continue to be implemented gradually and cautiously. Key to this judgment is the evaluation of the size of capacity gaps compared to the magnitude of the monetary stimulus: while the former have narrowed and inflation has increased, monetary policy remains highly expansionary. With this, the Board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.




Mario | mario@tradingeconomics.com
12/4/2018 9:47:34 PM


News

Chile Raises Interest Rate by 25 Bps to 2.75%
The Central Bank of Chile raised its benchmark interest rate by 25 bps to 2.75 percent on 18 October 2018, matching market expectations. The decision was unanimous to ensure that inflation perspectives remain close to the target of 3% over the two-year horizon. Policymakers mentioned that global and regional growth prospects deteriorated since the last minutes, while consumer prices jumped to a two-year high in September, underscoring rising yields. Inflation in Chile increased to 3.1 percent year-on-year in September of 2018 from 2.6 percent in the previous month. It was the highest inflation rate in two years.
Published on 2018-10-19

Chile Holds Interest Rate at 2.50%
The Central Bank of Chile held its benchmark interest rate at 2.50 percent on 4 September 2018, in line with market expectations. The decision was unanimous. Policymakers underscored that emerging market currencies have depreciated and growth prospects deteriorated in recent months, and showed concern over trade disputes between the United States and China. They also mentioned that inflationary risks have increased due to the peso’s further depreciation. Inflation rate in Chile rose to 2.7 percent year-on-year in July 2018 from 2.5 percent in the previous month. It was the highest inflation rate since April 2017.
Published on 2018-09-04

Chile Keeps Interest Rate Unchanged at 2.50%
The Central Bank of Chile held its benchmark interest rate at 2.50 percent on 24 July 2018, in line with market expectations. The decision was unanimous. Policymakers underscored that emerging market currencies have depreciated in the recent months and showed concern over trade disputes between the United States and China. They also mentioned that inflationary risks have increased due to the peso’s further depreciation. The central bank expects to keep the monetary stimulus at its current level until inflation converges towards 3 percent. Inflation in Chile increased to 2.5 percent in June of 2018 from 2.0 percent in the previous month. It was the highest inflation rate since May of 2017.
Published on 2018-07-24

Chile Keeps Interest Rate Steady at 2.50%
The Central Bank of Chile held its benchmark interest rate at 2.50 percent on 13 June 2018, in line with market expectations. The decision was unanimous. Policymakers underscored that emerging market currencies have depreciated in the recent months, and that prices of commodities have gone up. The central bank expects to keep the monetary stimulus at its current level until inflation converges towards 3 percent. The annual inflation rate in Chile increased to 2.0 percent in May of 2018 from 1.9 percent in the previous month.
Published on 2018-06-13



Chile Money Last Previous Highest Lowest Unit
Interest Rate 2.75 2.75 14.00 0.50 percent [+]
Interbank Rate 3.10 3.09 7.45 0.06 percent [+]
Money Supply M1 35391.13 33859.78 35391.13 81.57 CLP Billion [+]
Money Supply M2 137118.52 134272.59 137118.52 753.65 CLP Billion [+]
Money Supply M3 233456.37 230017.68 233456.37 1231.77 CLP Billion [+]
Foreign Exchange Reserves 39855.60 39535.80 42302.70 1998.90 USD Million [+]
Banks Balance Sheet 142127.00 138801.00 142127.00 19067.00 CLP Million [+]
Loans to Private Sector 100022.00 100124.00 100124.00 15521.00 CLP Billion [+]
Deposit Interest Rate 2.90 3.80 48.68 1.75 percent [+]
Private Debt to GDP 189.10 196.80 198.70 137.60 percent [+]
Central Bank Balance Sheet 26131.00 26275.00 27557.00 10730.92 CLP Million [+]


Chile Interest Rate

In Chile, interest rate decisions are taken by The Central Bank of Chile (Banco Central de Chile). The official interest rate is monetary policy interest rate (PDBC Pagarés Descontables del Banco Central) which is overnight interbank interest rate. This page provides - Chile Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Chile Interest Rate - actual data, historical chart and calendar of releases - was last updated on January of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.75 2.75 14.00 0.50 1995 - 2018 percent Daily




Country Last Previous
Argentina 57.13 Jan/19
Turkey 24.00 Jan/19
Mexico 8.25 Dec/18
Russia 7.75 Dec/18
South Africa 6.75 Dec/18
Brazil 6.50 Dec/18
India 6.50 Dec/18
Indonesia 6.00 Jan/19
China 4.35 Dec/18
Saudi Arabia 3.00 Dec/18
United States 2.50 Dec/18
Singapore 1.76 Dec/18
Canada 1.75 Jan/19
South Korea 1.75 Dec/18
Australia 1.50 Dec/18
United Kingdom 0.75 Dec/18
Euro Area 0.00 Dec/18
France 0.00 Dec/18
Germany 0.00 Dec/18
Italy 0.00 Dec/18
Netherlands 0.00 Dec/18
Spain 0.00 Dec/18
Japan -0.10 Dec/18
Switzerland -0.75 Dec/18


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