Scotiabank Previews This Week's Central Bank Meetings in Chile, Peru

11:48 AM EDT, 09/08/2025 (MT Newswires) -- Chile's central bank (BCCh) delivers its next policy decision on Tuesday, noted Scotiabank.

The consumer price index for August arrives on Wednesday. Inflation is running at 4.3% year over year, with core at 3.8% year over year. After a larger-than-seasonally-unusual rise of 0.9% month-over-month non-seasonally adjusted (NSA) in July, most expect a reading for August of about 0.2-0.3% month over month, which would keep the

year-over-year rate little changed, said the bank.

BCCh targets inflation within a 2%-4% range. On the face of it, it could be expected that the central bank would retain a tight policy stance, stated Scotiabank. It cut, however, on July 28, and while most expect it to hold this week, a concern has been the health of the labor market as the unemployment rate has edged up this year to 8.7% while some slack is forecast to drive inflation lower over time.

Scotiabank predicts BCCh will leave the policy rate at 4.75% on Tuesday.

Peru's central bank (BCRP) is forecast to cut by 25bps on Thursday, according to Scotiabank. Consensus is somewhat divided between a cut and a hold. It would be the first

reduction since May.

The case for a cut includes little to no inflation, added the bank. Lima CPI is running at just 1.1% year over year, with core CPI at 1.8%. That puts both measures beneath the mid-point of the 1%-3% inflation target zone. Expectations have also ratcheted lower.

The case for a hold is to allow more time to evaluate risks to trade policy -- including court challenges to United States tariffs -- and a mild pick-up in growth, although the economic activity index for June climbed to 4.5% year over year largely because of a shift in the comparisons toward a lower base effect the prior June, pointed out Scotiabank.

The bank sees BCRP reducing the reference rate by 25bps to 4.25%.

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