Banco Central de Chile on Oct. 18 decided to raise the interest rate by 25 basis points to 2.75%.

Annual CPI inflation edged up to 3.1% in September. The central bank reaffirmed its commitment to conduct monetary policy with flexibility, so that projected inflation is maintained at 3% over a two-year period.

Investment, especially in machinery and equipment, continued to lead the increase in domestic spending.

Expectations about the economic situation of households one year ahead are still positive.

The bank expects its monetary policy rate will converge to its "neutral" level in 2020. This will provide the necessary room for it to define the "appropriate pace" of a monetary stimulus withdrawal, said the bank.