Monetary Policy Rate in Chile

The Monetary Policy Rate (TPM) is the benchmark interest rate set by the Board of the Central Bank of Chile to steer the cost of credit in the economy and anchor inflation at its 3% target.

It is not a statistic: the Board sets it at the Monetary Policy Meetings (RPM), eight a year on a published calendar, guided by inflation and the cycle. The rate serves as the benchmark for overnight money-market operations.

Hikes raise borrowing costs and tend to slow activity and inflation; cuts cheapen credit and support consumption and investment. It is the key gauge of Chile's monetary stance and moves the Chilean peso (CLP).

It is a discretionary Board decision that changes only on meeting dates, and its effect on the real economy works with lags of several quarters.