FX.co ★ Chile Maintains Rate at 4.75%

In its October meeting, the Central Bank of Chile opted to maintain its benchmark interest rate at 4.75%, a decision made unanimously and anticipated by analysts. The board highlighted that international conditions have largely unfolded as projected. Notably, the US Federal Reserve reduced interest rates amid indicators of weakness in the labor market and a partial government shutdown in the US. Global financial markets have generally shown positive trends; simultaneously, oil prices have seen a slight decrease, while copper prices have surged significantly due to supply limitations and geopolitical influences. On the domestic front, both activity and demand have aligned with forecasts from the September Monetary Policy Report (IPoM). Although the economic activity index (Imacec) showed a 0.7% contraction month-on-month in August, it increased by 0.5% year-on-year, with the non-mining sector experiencing a 1.7% rise. The labor market continues to present mixed signals, characterized by a slight decrease in unemployment and a deceleration in wage growth. In September, overall inflation reached 4.4%, and core inflation was at 3.9%, both aligning with expectations. Meanwhile, inflation expectations for the next two years are anchored around 3%.