The Central Bank maintains the rate and warns of a "significant" rise in inflation due to fuel prices.

One of the most anticipated interest rate decisions in recent months was announced this afternoon by the Central Bank's council, which chose not to surprise the market. As expected, the entity led by Rosanna Costa maintained the rate at 4. 5%.

The decision was made unanimously by the council members. This comes amid a backdrop of high global uncertainty marked by the war in the Middle East and the shock in oil prices. This context will have inflationary effects in Chile, especially following the historic rise in fuel prices that will take effect this Thursday, with increases of $370 in gasoline and $580 in diesel.

In fact, in its analysis, the entity stated that "the external shock caused by the war in the Middle East is significant due to the magnitude and speed with which fuel prices have risen globally. " "These increases will be transmitted to local prices and will significantly raise inflation, which is expected to be around 4% annually in the second quarter," it noted. It added, however, that these effects, in the medium term, "will dissipate, assuming that the propagation of the external shock behaves around historical averages, that there are no new significant increases in international prices, and that domestic demand moderates its expansion.

" "If this scenario occurs, inflation will return to levels consistent with the target by 2027. However, given its magnitude, the council will be particularly attentive to signs of greater transmission and/or persistence of inflation from the shocks being faced," it emphasized, highlighting that "the macroeconomic scenario is subject to a higher degree of uncertainty than usual. " "For this reason, the council believes that constant evaluation of alternative scenarios will be necessary, in which the response of the global and local economy may create inflationary pressures different from those expected and require changes in monetary policy.

Thus, the future evolution of the monetary policy rate will be assessed meeting by meeting based on the development of events. The Council reaffirms that it will make the necessary decisions to ensure that projected inflation is at 3% within a two-year horizon," the Central Bank stressed. In its statement, the Central Bank noted that the war in the Middle East has significantly increased global uncertainty and pushed oil prices towards $100 per barrel, putting pressure on inflation and activity.

In this context, it added that financial conditions have tightened—with rising rates, falling stock markets, and a strengthened dollar—a trend that is also reflected in Chile, where depreciation of the peso and higher rates are observed.