Chile: Central Bank of Chile holds rates in April
March hold priced in by markets: On 28 April, the Central Bank of Chile stood pat, leaving its policy rate at 4.50%. The hold matched market expectations and kept rates at their lowest level since Q1 2022.
Bank takes wait and see approach: With inflation within the Bank’s 2.0–4.0% target range, economic activity expanding and war in the Middle East increasing uncertainty over the inflation outlook, the Bank opted for a cautious approach by keeping rates stable.
Rates likely to stay on hold: The Bank’s forward guidance was open-ended in light of high geopolitical uncertainty. Most panelists see the policy rate ending 2026 at its current level, with some seeing cuts and some hikes.
Panelist insight: “We still believe that the MPC is inclined to look through the supply-driven oil shock, but the bar for hikes is not high given the only marginally restrictive policy stance. A key driver for monetary policy, in our view, will be whether spillovers from the oil shock to core inflation broaden beyond expectations. While near-term inflation expectations have risen, we expect them to improve as we move away from the large increase in fuel prices as annual inflation readings are poised to benefit from large base effects in 2026.”