Sticky Inflation Anchors Peso While Santiago Stocks Ease Back

The Central Bank of Chile set the “dólar observado” at 965.06 for 21 August 2025. The peso remained close to that level through the morning, reflecting a balance between domestic inflation pressures and a steady external dollar environment.

The National Statistics Institute reported July inflation of 0.9 percent month-on-month and 4.3 percent year-on-year, keeping headline inflation above the 2–4 percent target range.

The Central Bank lowered its benchmark rate by 25 basis points to 4.75 percent on 29 July, and market surveys suggest a pause at that level. The bank maintains its medium-term inflation anchor at 3 percent.

The U.S. Dollar Index, compiled by ICE and widely used in international markets, continues to trade close to 98.3. The Federal Reserve’s own broad dollar index, published weekly in its H.10 release, also reflects a broadly stable U.S. currency.

With no external shock from the dollar, the peso has held a narrow range around 965. The Santiago Stock Exchange recorded a pullback.

The IPSA closed Wednesday at 8,683.66 points, a fall of 0.61 percent, after touching levels above 8,800 earlier in the week. The retreat reflects profit taking following a rally that pushed the index into record territory.

Among the most active shares, Latam Airlines, Banco de Chile, and Banco Santander Chile moved lower, reflecting rotation after recent gains.

Enel Américas and Vapores also recorded declines. On the positive side, smaller advances in industrial and retail counters provided partial support, though not enough to offset the broader retreat.

In regional comparison, the Chilean peso showed relative stability against the dollar. The Colombian peso and Brazilian real experienced sharper fluctuations in recent sessions.

The IPSA’s measured decline contrasts with higher volatility in Mexico’s IPC and Brazil’s Bovespa, both of which reacted to domestic political and fiscal developments.

Technical signals confirm the cooling tone. Moving averages on the daily time frame cluster near current prices, relative strength indicators hover in neutral territory, and Bollinger Bands narrow.

The IPSA shows a strong longer-term uptrend but momentum indicators such as RSI and MACD point to consolidation around the 8,600 to 8,700 zone before any renewed advance.

The picture for the last 24 hours therefore combines domestic inflationary pressure, which restrains monetary easing, with an external backdrop of dollar stability. The peso holds its ground around 965, while equities retreat from record levels as investors lock in profits.

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