Chile enters the second half of the year with resilience intact but pressure mounting. Inflation has edged down but remains above target, and the Central Bank is staying cautious. The peso has softened, regulatory reforms are gathering pace and labour market fragilities persist. Under the surface, vulnerabilities in infrastructure and cyber resilience are coming into sharper focus. With elections now only months away, the political noise is rising and the margin for error is narrowing further.
Monetary Policy.No surprises from the Central Bank. Rates remain on hold at 5% following the May meeting, with the Bank reiterating its cautious stance. Sticky inflation and global uncertainty - from US tariffs to broader EM volatility - have kept the easing cycle frozen. The countercyclical capital buffer was left unchanged at 0.5%, reinforcing the Bank’s view that conditions don’t warrant loosening just yet.
Currency & Capital Flows.The peso has slipped slightly, now hovering around 930 to ...
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