Chile's Central Bank Slashes Interest Rate Amid Inflation Concerns

Chile's central bank has cut its benchmark interest rate by 50 basis points to 6.00%. This decision aligns with trader forecasts. The bank anticipates further cuts, dependent on the macroeconomic scenario and inflation trajectory. Currently, inflation has increased to 4.0% in April 2023 from a low of 3.9% in 2022.

Chile's central bank cut its benchmark interest rate by 50 basis points to 6.00% on Thursday in a unanimous decision, saying that it foresees further cuts to the rate.

The cut was in line with forecasts in a traders' poll last week. In a statement, the bank said it foresees further rate cuts, with the size and timing of those moves taking into account the "evolution of the macroeconomic scenario and its implications for the trajectory of inflation."

Annual inflation in the world's largest copper producer peaked at 14.1% in August 2022 and came down to 3.9% at the end of 2023, but has since ticked back up, reaching 4.0% in April

. The central bank has been cutting interest rates since last year after inflation receded, having reduced its benchmark rate by a total 525 basis points so far as of Thursday.

Chile's central bank targets inflation at 3%, plus or minus one percentage point.

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