Chile Economics: Central Bank Minutes: No Closer to September

Research evidence excerpt

M

Idea

August 5, 2026 06:44 PM GMT

Chile Economics | Latin America

Morgan Stanley & Co. LLC

Nicolas Eterovic

Economist

Central Bank Minutes: No

Closer to September

Morgan Stanley C.T.V.M. S.A.

Julia Lobato Barbosa

Economist

Key Takeaways

The July minutes reinforce a balanced stance similar to the statement, with the

Board reiterating that holding at 4.50% was the only plausible option.

The renewed US-Iran escalation pushed oil back toward US$100/bbl (~14% above

the June meeting level), reviving upside inflation risk.

The Board explicitly framed risks as two-sided rather than skewed toward

tightening, leaving us no closer to a September cut than before.

The minutes of the July meeting — where the BCCh held rates at 4.50% —

reinforce the balanced, meeting-by-meeting tone already signaled in the

statement. All five Council members agreed the macro scenario continues to unfold

amid elevated uncertainty, explicitly citing the resurgence of Middle East conflict

risks, and concurred that the strategy laid out in the June IPoM remains valid.

Consistent with that, the Board judged that maintaining the MPR at 4.50% was the

only plausible option this round, with caution continuing to guide its approach given

greater risks on both the domestic and external sides.

On activity and inflation dynamics. On inflation, members downplayed June's core

upside surprise (3.4% y-o-y), framing it as a reversal of a couple of months of

favorable prints rather than a trend shift, and noted that fuel-price pass-through

continues to track historical averages. Two-year expectations, both EEE and EOF,

remain anchored at 3%. Externally, the Board acknowledged that the oil market

deteriorated again as the US-Iran ceasefire gave way to renewed attacks, pushing

WTI-Brent back to around US$100/bbl — about 14% above the June meeting level,

though the increase has moderated at the margin. Members still expect global

activity to prove resilient, resting on two assumptions: that geopolitical tensions

ultimately resolve without a persistent energy-market disruption or global recession

and that elevated AI-related investment continues to support growth. But

…