The Board of the Central Bank of Chile kept the monetary policy rate (TPM) at 4.5% on Tuesday, October 27, unanimously and for the seventh meeting in a row, but it changed its tone: "Risks to inflation have increased significantly," it said in its statement, according to [CNN Chile](https://www.cnnchile.com/negocios/banco-central-mantiene-tpm-45-septima-reunion-consecutiva/) and [El Mostrador](https://www.elmostrador.cl/mercados/2026/10/27/banco-central-mantiene-tasa-en-45-y-advierte-mas-riesgos-inflacionarios-y-debilidad-economica/). The rate has been at that level since December 2025.
The warning comes with inflation at 4.1% a year, oil about 25% more expensive than in September and an economy that is not taking off. That is why several economists already see the next move as a hike, although they disagree on the timing. This article sums up what the central bank said, what banks expect and what it means for your loans.
What Chile's central bank said as it held the policy rate at 4.5%
| Figure in the statement | Value | Reading |
|---|---|---|
| Monetary policy rate | 4.5% | Unchanged for a seventh straight meeting; unanimous decision |
| CPI inflation to September (12 months) | 4.1% | In line with forecasts, but projections for the coming months rise |
| Core inflation (excluding volatile items) | 3.2% | Also in line with forecasts |
| Oil (average of WTI and Brent) | About +25% since the September IPoM | Because of tensions in the Middle East |
| August Imacec (monthly activity index) | −1.0% year on year | Below expectations, due to mining; non-mining activity grew 1.4% |
| Two-year inflation expectations | 3% (EEE) and 3.2% (EOF) | The traders' survey is already drifting from the target |
| Next meeting | Tuesday, December 15 | October minutes: Wednesday, November 4 |
Sources: central bank statement quoted by CNN Chile, El Mostrador and BioBioChile. EEE is the Economic Expectations Survey and EOF the Financial Traders Survey, both run by the central bank itself. For the first time this year, the statement mentioned an "unusually intense" El Niño that is already pushing up international food prices.
The Board also said it "cannot be ruled out" that the economy's weakness will last longer than expected, and that the path of the rate "will be assessed meeting by meeting". It reaffirmed its commitment to bring projected inflation back to 3% over a two-year horizon.
Will the policy rate rise in December? What economists expect
The market's reading is that the next TPM move will be upward. The question is when. These are the forecasts published after the meeting:
| Who | What they expect | Source |
|---|---|---|
| Scotiabank (Jorge Selaive) | A 25 basis point hike in December, to 4.75%; the rate could reach 5% | CNN Chile and La Tercera |
| Pablo García (former central bank vice governor) | A hike in December or January if there is another inflation surprise | La Tercera |
| Santander | Hold at 4.5% through December | La Tercera |
| Itaú (Andrés Pérez) | Hold over the whole horizon; if risks materialize, the next step would be a hike | La Tercera |
| OCEC-UDP (Juan Ortiz) | Higher odds of a hike in the first quarter of 2027 | La Tercera |
| Rojas y Asociados (Patricio Rojas) | Hold and reassess at the end of the first quarter of 2027 | La Tercera |
Sources: La Tercera and CNN Chile. Scotiabank projects cumulative inflation of 5% through November, well above the 4.3% the central bank estimated for December in its September Monetary Policy Report (IPoM). According to the bank, the market expects between 4.7% and 5% through November, which would require an unprecedented negative CPI reading in December to meet the official forecast.
Chile's interest rate since 2022
| Date | TPM | Context |
|---|---|---|
| October 2022 | 11.25% | Highest in the series since 2007, with inflation above 14% |
| July 2023 | 10.25% | Start of the cuts |
| December 2024 | 5% | End of a year of cuts |
| July 2025 | 4.75% | Cut |
| December 2025 | 4.5% | Last change |
| January to October 2026 | 4.5% | Seven meetings without changes |
Source: policy rate series from the Bank for International Settlements, with data from the Central Bank of Chile. How the rate is set and how it reaches loans is explained in what the TPM is and how it affects your wallet. Before the meeting, traders were already expecting this hold (see what traders expected).
Why concern about inflation is rising
- Fuel: oil rose with the war in the Middle East, and Chile has already had five straight gasoline price increases (see the fifth fuel price increase).
- Food: El Niño is starting to push up food prices on international markets.
- Dollar: the peso weakened and the observed dollar hit its highs of the year (see the dollar above $987), which makes imports more expensive.
- Indexation: many prices in Chile are adjusted by CPI or the UF, which can prolong the effect of a shock.
At the same time, activity is weak: GDP has contracted so far this year and unemployment rose slightly in the quarter to August. That is the central bank's dilemma: raising the rate cools an already sluggish economy even more, but not doing so risks inflation drifting away from the target. Growth forecasts for Chile are summed up in the IMF's downgrade.
What a 4.5% policy rate means for your loans
| Product | Effect of the hold | If the TPM rises in December |
|---|---|---|
| Consumer loans and credit cards | Stable rates in the short term | Would tend to rise within weeks |
| Mortgage | Depends more on long-term rates, which have already risen | Additional upward pressure |
| Time deposit | Stable returns | Would pay a bit more |
| Dollar | Copper and US rates matter more | A hike tends to support the peso |
These are general trends, not exact rules. If you are about to take out a mortgage, it is worth getting quotes now and comparing fixed UF rates across banks (see what the UF is). The comparison with rates in other countries of the region is in our ranking of interest rates in Latin America.
Frequently asked questions
Where did Chile's TPM end up in October 2026?
At 4.5%. The Central Bank of Chile held it unanimously on October 27, for the seventh meeting in a row.
When is the central bank's next meeting?
Tuesday, December 15, 2026. The minutes of the October meeting are published on November 4.
Will interest rates rise in Chile?
There is no announcement. Scotiabank expects a 25 basis point hike in December; Santander and Itaú expect a hold, and other economists see a hike only in the first quarter of 2027.
Why does the central bank speak of higher inflation risks?
Because of the rise in oil (about 25% since September), the effect of El Niño on food and the weakening of the peso.
What is inflation in Chile?
4.1% over 12 months to September 2026, with core inflation of 3.2%, according to the INE's CPI cited by the central bank.
