Chile Holds Interest Rate Steady as U.S. Tariffs Challenge Export Growth

Chile’s Central Bank, according to its official statement, kept the benchmark interest rate at 5% for the fourth straight time this April. This decision follows the United States’ recent move to impose a 10% tariff on imports from Chile and other countries.

The Chilean government, through Finance Minister Mario Marcel, confirmed that copper and timber exports are temporarily exempt, pending a U.S. review. Despite this, most other goods now face higher costs in the U.S. market.

Chilean exports reached a record $100.2 billion in 2024, driven by copper, which brought in $50.9 billion, up 17.3% from the previous year. However, lithium exports dropped 56.6% to $2.9 billion.

The U.S. remains a key market, taking in $953.7 million in Chilean services alone. Over 8,500 Chilean companies exported goods last year, with small and medium-sized firms accounting for 53% of exporters and $2.2 billion in shipments.

The U.S. tariffs come as global financial markets face volatility, with rising U.S. interest rates and mixed performance in equities and currencies. Chile’s peso has strengthened 7% and its IPSA stock index rose 6%, reflecting some resilience.

Headline inflation in Chile stood at 4.9% in March, with the Central Bank aiming to bring it down to 3% over two years. Chile’s government stresses its commitment to open trade and is using its Free Trade Agreement with the U.S. to address these challenges.

Exporters now face a more complex landscape, as tariffs and shifting global demand test the country’s long-standing export-led growth model. The Central Bank continues to monitor risks, balancing inflation control with support for economic activity.