TPM: what Chile's monetary policy rate is, how it affects your loans and its history (2019-2026)

The monetary policy rate (TPM) is the interest rate set by the Central Bank of Chile for very short-term interbank lending, and it is the main tool the bank uses to keep inflation close to its 3% annual target. As of November 10, 2026, it stands at 4.5%, where it has been since December 17, 2025, according to the series from the Central Bank of Chile, via mindicador.cl. Over the last seven years it went from a low of 0.5% during the pandemic to a high of 11.25% in October 2022. This guide explains what it is, who sets it, how it reaches your loans and savings, and how it compares with other countries.

Technically, the TPM is the rate the Central Bank targets for the overnight interbank market: the interest at which banks lend to each other from one day to the next. The Central Bank keeps it at that level by injecting or withdrawing liquidity. Because banks fund themselves partly at that rate, when the TPM rises all peso credit gets more expensive, and when it falls it gets cheaper. The goal is not credit itself but inflation: a high TPM cools consumption and investment and helps bring prices down; a low one stimulates them. The Central Bank's target is for CPI to rise 3% a year over a two-year horizon, according to its Central Bank of Chile, monetary policy.

It is set by the five-member Central Bank Board at Monetary Policy Meetings (RPM), eight a year, on a calendar published in advance. At the end of each meeting the Central Bank releases a statement with the decision, and two weeks later the minutes, which show how each board member voted and which options were discussed. The last meeting was on October 26-27, 2026, detailed in the October minutes; the next one is on Tuesday, December 15, together with the Monetary Policy Report (IPoM).

The TPM's recent history has four stages. In 2019 and early 2020 the Central Bank cut it from 3% to 1.75% amid a weak economy, and with the pandemic it lowered it in March and April 2020 to 0.5%, its technical floor. From July 2021 it began its fastest hiking cycle in recent history, to curb inflation that reached double digits in 2022, up to 11.25% in October 2022. In July 2023 it started cutting, with large cuts at first and slower ones later, down to 5% in December 2024. In 2025 it made two 25 basis-point cuts, in July and December, and has kept it at 4.5% since then.

The TPM is not the rate your bank charges you, but it moves it. The effect is direct and fast on short-term peso products, and slower on long-term UF products.

• Peso term deposits: closely track the TPM. With the TPM at 4.5%, 30-day deposit rates hover around that annual level; how much a term deposit earns has figures by bank.
• Consumer loans and cards: adjust with some lag, because their rate depends mostly on the borrower's risk and the bank's costs, not only on the cost of money.
• UF mortgages: respond more to long-term yields on Central Bank and Treasury bonds than to the TPM; see mortgage rates today.
• The dollar: a high TPM relative to the US rate tends to attract capital and strengthen the peso; a low one does the opposite.

The maximum rate the law allows on a loan, the maximum conventional rate, also moves with the average of the rates banks charge, so a higher TPM ends up lifting that ceiling. We explain it in the guide to the maximum conventional rate.

At 4.5%, Chile has a lower policy rate than Brazil (13.75%), Colombia (12.25%) and Mexico (6.5%), and just above Peru (4.25%), according to end-of-October 2026 data from the Bank for International Settlements (BIS), central bank policy rates. Among developed economies, the US Federal Reserve has its range at 3.75%-4% (3.875% midpoint) and the European Central Bank at 2.5%. The comparison matters for the exchange rate: the gap between Chile's TPM and the Fed rate is now about 0.6 points, far smaller than in 2022 and 2023.

The Central Bank kept the TPM at 4.5% at its October meeting, in weeks of rising oil and dollar prices. Afterwards, October CPI took annual inflation to 4.5%, above its target. Both factors partly reversed in November: the observed dollar fell to CLP 969.80 and Brent fell nearly 20% from late October, as we report in today's market summary. The December decision will depend on those data, November CPI and the IPoM projections. Pauta Financiera does not forecast decisions: it reports what the Board publishes.

To know whether monetary policy is tightening or loosening the economy, economists look at the real TPM: the nominal rate minus inflation. With the TPM at 4.5% and annual inflation of 4.5% as of October 2026, the real rate is close to zero. In October 2022, by contrast, the TPM was 11.25% with inflation above 12%, and in 2020 the 0.5% rate coexisted with inflation of about 3%, that is, a negative real rate aimed at stimulating the economy during the pandemic. The Central Bank compares the TPM with the so-called neutral rate, the one that neither stimulates nor slows activity, which it estimates in its Monetary Policy Reports.

For savers, the real TPM is a useful signal: if a peso term deposit pays close to the TPM and inflation is similar, savings barely keep their purchasing power. That is why, in periods of high inflation, many savers prefer UF instruments, which are adjusted by CPI. How the UF moves month by month is explained in the UF through December 9.

What is the TPM today in Chile?

4.5% a year, in force since December 17, 2025.

What does TPM stand for?

Tasa de política monetaria (monetary policy rate): the overnight interbank interest rate set by the Central Bank of Chile.

When is the next monetary policy meeting?

On Tuesday, December 15, 2026, together with the December IPoM.

What was the highest TPM in recent years?

11.25%, between October 13, 2022 and July 30, 2023.