Interest rate increase: On 18 October Chile’s central bank (BCCH) increased its bench mark interest rate by 25 basis points to 2.75%. This is the first time that the BCCH has increased its benchmark interest rate since 2015, suggesting that the BCCH board is starting to become concerned about inflationary pressures in the domestic economy. A BCCH statement said that the decision to increase the policy rate was unanimously taken by the BCCH board and answered to market expectations about rising inflation, mainly due to rising international oil prices. Chile’s inflation rate increased by 0.3% in September bringing the annualised inflation rate to 3.1%, marginally above the BCCH’s target of 3%.
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