MNI Chile CB Preview - Sep 2025: Rate Hold Seen, Risk Of Cut

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Executive Summary

• The majority of analysts expect the BCCh to keep its policy rate unchanged at 4.75% on Tuesday following recent upbeat non-mining activity and firmer than expected CPI inflation data last month.
• Despite the volatility of CPI inflation recently, however, GDP has developed as the central bank projected, and inflation expectations are largely unchanged. 

• As such, the BCCh is expected to maintain its forward guidance for further gradual cuts to a neutral range in the coming quarters. Indeed, today’s soft August inflation data keep the door open to another move as soon as this week.

   

After delivering the widely expected 25bp rate cut in July, the central bank Board struck a dovish tone on inflation, sounding more comfortable about risks to the outlook, given that headline inflation had come in lower than expected ahead of the meeting. The Board also maintained the guidance for further rate cuts to the neutral range in the coming quarters, with policy decisions remaining data dependent. Although mixed inflation data since have increased expectations for a renewed pause this week, the central bank is still widely expected to proceed with further gradual rate cuts over the coming meetings, and the door is still open to another move as soon as Tuesday.

Speaking just ahead of the strong July CPI data last month, BCCh Vice President Stephany Griffith-Jones said that she saw one more rate cut before the end of this year - in September, subject to things "going well" - and another at the beginning of 2026. Subsequently, BCCh Governor Rosanna Costa acknowledged that CPI inflation has been highly volatile recently, with both the June and July CPI figures surprising expectations. Nonetheless, Costa said that GDP had developed as the central bank projected, with non-mining activity also in line with expectations, while inflation expectations have remained largely unchanged.