LatinNews Daily - 18 June 2025

*Chile’s central bank (BCCh) has maintained its benchmark interest rate at 5% for a fourth consecutive meeting. A BCCh press release announcing the decision, which was made unanimously, said that the “international scenario remains marked by uncertainty associated with the evolution of trade tensions, and the effects of this on the global economy”, adding that the “escalation of military conflict in the Middle East adds further uncertainty to this scenario” and could “result in more complex scenarios”. Yet the BCCh statement notes that domestic growth had exceeded forecasts, driven by export-related sectors, with the latest monthly index of economic activity (Imacec), a key proxy for GDP, showing that the Imacec grew by 0.6% in April from the previous month – triple the 0.2% median estimate of analysts in a Bloomberg survey. It also said that inflation had declined in recent months, coming in at 4.4% in annual terms in May, while core inflation, which excludes volatile items like food and fuel, dropped more than expected, coming in at 3.6% year-on-year in May. In its statement, the BCCh reaffirmed its commitment to conducting monetary policy with flexibility, so that projected inflation will be at 3% over the two-year horizon. The decision to hold interest rates was expected by 16 of 21 analysts in a Bloomberg survey. The remaining five forecast a quarter-point reduction to 4.75%.

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