Chile Interest Rate

The Central Bank of Chile left its benchmark interest rate unchanged at 4.75% in a unanimous decision during its October meeting, as expected. The board noted that the external environment has evolved largely as projected, with the US Federal Reserve cutting rates amid signs of labour market weakness and a partial US government shutdown. Global financial markets have performed favourably overall, while oil prices fell slightly and copper rose sharply on supply constraints and geopolitical factors. Domestically, activity and demand have evolved in line with projections from the September IPoM, with August’s Imacec contracting 0.7% month on month but rising 0.5% year on year, while the non-mining component increased 1.7%. The labour market continues to send mixed signals, with a mild decline in unemployment and slowing wage growth. Total inflation reached 4.4% in September and core inflation 3.9%, both in line with forecasts, while two-year inflation expectations remain around 3%.