HomeTop Global NewsChile Central Bank Cuts Rates By 100 Basis Points as Inflation Cools

Chile Central Bank Cuts Rates By 100 Basis Points as Inflation Cools

Chile’s central bank cut its benchmark interest rate by 100 basis points to 10.25% as inflation in the country cools at a quicker pace than expected.

Annual inflation in the South American nation slowed to 7.6% in June, beating market expectations. This is lower than May’s figure of 8.7% as well as the 14% peak in August 2022.

From July 2021 to October 2022, Chile’s central bank hiked interest rates by a combined 1,075 points in an effort to combat surging inflation. The central bank was able to hold its interest rates at a high of 11.25% until its latest decision to lower rates back down.

Scotiabank Chile’s chief economist Jorge Selaive referred to the rate cut as “aggressive”, commenting, “There’s little doubt, in light of the data and this decision, that the (central bank) is trying to get ahead of the curve.” He added that he expects the bank’s interest rate to be 7.5% or lower in December this year.

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