The Central Bank of Chile opted to keep its monetary policy interest rate at 4.5% on Tuesday, a move that matched market expectations and was approved unanimously by the bank's board.
In explaining its stance, the board highlighted ongoing volatility in the international environment related to the conflict between the United States and Iran. The bank noted that, after a ceasefire agreement in June, a subsequent escalation of attacks pushed oil prices back toward the $100-per-barrel range, although that upward pressure has recently eased. At the same time, the copper price was reported at about $6.3 per pound.
On the domestic front, Chile's total Imacec contracted by 0.9% year-on-year in May. Its non-mining component, by contrast, recorded a 0.7% annual increase. Both outcomes were below the forecasts set out in the June IPoM. The central bank said high-frequency indicators point to a more pronounced slowdown in investment during the second quarter than previously expected.
The labor market showed signs of strain: the unemployment rate rose, reflecting persistently weak job creation, while hourly labor costs accelerated. Against that backdrop, headline consumer price index inflation reached 4.3% year-on-year in June, a result above the bank's most recent IPoM estimates and market expectations. Core inflation was recorded at 3.4% annually in the same month.
Expectations for inflation over the two-year horizon remain anchored at 3.0%, according to both the Economic Expectations Survey and the Financial Traders Survey cited by the bank.
Looking ahead, the board said it will evaluate the future path of the monetary policy rate on a meeting-by-meeting basis. The minutes from this monetary policy meeting are scheduled for publication at 8:30 hours on August 5, 2026. The next policy meeting is set for September 8, 2026.
Contextual note - The central bank underlined the combination of external uncertainty tied to geopolitical tensions and internal indicators pointing to softer activity and elevated inflation as the rationale for maintaining the current policy setting.