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The Central Bank of Chile lowered its benchmark interest rate by 25 bps to 1.75 percent at its October 2019 meeting, as widely expected. It is the third rate cut so far this year and comes after a 50-bps cut in September, bringing borrowing costs to its lowest since 2010. Policymakers underscored that social unrest observed in recent days will have an impact on economic activity and in confidence. The Committee said that the decision assumes that for inflation to converge to the target it is necessary a further monetary boost, which will be assessed in the light of the macroeconomic scenario, in particular after the events of recent days. Policymakers added that they will continue to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.

The Central Bank of Chile lowered its benchmark interest rate by 50 bps to 2 percent at its September 2019 meeting, as widely expected. It is the second rate cut so far this year, bringing borrowing cost to the lowest since 2010. Policymakers said that the decision was based in the performance of the economy in the second quarter and its outlook and noted that the convergence of inflation to the target range will take longer than expected. The Committee added that an extension of monetary stimulus could be required, in light of the macroeconomic scenario evolution. Policymakers mentioned that the economy is projected to grow 2.6 percent for 2019, 3.1 percent for 2020 and 3.3 percent from 2021.

The Central Bank of Chile kept its benchmark interest rate unchanged at 2.50 percent at its July 18th 2019 meeting. Policymakers noted higher risks associated with the timely convergence of inflation to the target over the policy horizon, mainly due to cost of services and surrounding the future evolution of activity and demand, amid external uncertainty. The Committee said that will extend the current monetary stimulus, if necessary, and added that they will continue to conduct monetary policy with flexibility, so that projected inflation stands at 3 percent in the two-year horizon.

The Central Bank of Chile cut its benchmark interest rate to 2.50 percent at its 7 June 2019, surprising market expectations of no change at 3.0 percent. The decision was unanimous. Policymakers were concerned by the evolution of global trade policy uncertainty and in turn growth prospects. They also warned about subpar domestic growth. Inflation jumped to 2.3 percent in May from 2.0 in April, mostly explained by a climb in electricity prices. Policymakers underscored that the output gap was updated to incorporate, among other factors, immigration factors.

The Central Bank of Chile held its benchmark interest rate at 3 percent during its May meeting, as widely expected, saying rates are expected to remain at current levels for an extended time amid low inflation expectations and global growth slowdown. Policymakers warned about escalating trade tensions between China and the US. On the price front, they mentioned an uptick in prices for foodstuffs and fuels. The annual inflation rate in Chile was at 2.0 percent in April 2019, unchanged from the previous month.

The Central Bank of Chile held its benchmark interest rate at 3 percent during its March meeting, as widely expected, saying rates are expected to remain at current levels for a longer time amid low inflation expectations and global growth slowdown.