Central Bank of Chile leaves rates unchanged in March

Latest bank decision: At its meeting on 21 March, the Central Bank of Chile decided to maintain the monetary policy interest rate at 5.00%.

Monetary policy drivers: The Central Bank likely decided to prolong the pause in its easing cycle—which saw the policy fall by 625 basis points from mid-2023 to late 2024—in light of elevated global economic uncertainty, a robust recent economic performance, and domestic inflation which is above the Bank’s 2.0–4.0% target range.

Policy outlook: The Central Bank provided no explicit forward guidance on the future direction of interest rates. Most of our panelists see room for mild monetary easing by end-2025, given inflation should fall later in the year as the economy metabolizes recent electricity tariff hikes. However, some panelists see rates on hold throughout this year.

Panelist insight: Itaú Unibanco analysts commented on the outlook: “We expect the new policy rate corridor to reflect a period of rates on hold, before taking further steps toward the 4% neutral nominal rate in 2026. Adopting a stay-on-hold approach in the near term will give the board time to gauge the breadth of the recent improvement in economic activity and consolidate the downward adjustment of CPI expectations.” Goldman Sachs’ Sergio Armella said: “The MPC is likely to hold rates unchanged for longer than originally forecasted due to an uncertain external environment. That said, we believe that lower inflation in the second half of the year could give the central bank comfort to resume rate cuts as external uncertainties dissipate. We expect the central bank to cut its benchmark rate two times in the second half of 2025 to 4.5%.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Chilean interest rate projections for the next ten years from a panel of 32 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Chilean interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Chilean interest rate projections.

Want to get access to the full dataset of Chilean interest rate forecasts? Send an email to info@focus-economics.com.