Central Bank of Chile holds rates at first 2026 meeting

January hold priced in by markets: On 27 January, 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 in four years.

Improving external backdrop and easing inflation drive decision: The Bank partly stood pat due to developments on the external front: U.S. economic activity has recently strengthened, boding well for demand for Chilean exports and GDP; moreover, copper prices—important to the Chilean economy as the country is the world’s largest exporter—have continued to trend up. In addition, on the domestic front, monthly economic activity has evolved broadly in line with expectations, and inflation has continued to ease toward the central bank’s 3.0% target, aided by a stronger peso and lower global fuel costs.

Easing likely to resume this year: Following the decision, the Bank suggested that rates will likely fall to 4.25% in the near term as the output gap is practically closed, inflation is near target, and there are, according to the Bank, no significant risks to prices in the short term. Accordingly, our Consensus is for rates to end this year 25 basis points below current levels. The Bank shall reconvene on 24 March.

Panelist insight: Itaú Unibanco analysts commented on the outlook: “The faster-than-expected disinflation underway will likely result in a March rate cut to a terminal rate of 4.25%. Monetary policy is within the neutral range and comes after a prolonged battle at converging inflation to the target. We believe the Board will favor a cautious approach after implementing the next cut, evaluating inflation and activity dynamics during the start of the year.”

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 34 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.