Chile central Bank holds Steady On Interest Rate Amid Global Uncertainty

Santiago De Chile – In a move closely watched by economists, The Central Bank Of Chile announced on Tuesday, June 17, 2025, it will maintain its benchmark interest rate at 5%. This decision comes in light of ongoing “uncertainty” in the global economy,exacerbated by tensions between Israel and Iran.

The Bank’s council voted unanimously to keep the monetary policy rate (TPM) unchanged, a level set initially in December. While holding steady for now, the council indicated in a released statement that they anticipate the TPM to gradually approach its neutral range in the coming quarters.

Key Factors Influencing The Decision

The central Bank highlighted that recent inflation trends have aligned with projections, and earlier risks have somewhat subsided. Economic activity has also shown more robust growth than initially anticipated.

however, the recent escalation of events in the Middle East has introduced new uncertainties. The bank acknowledges that the scope and potential impact of these events on the global and local economies remain largely unknown, making it a critical factor to monitor.

Chilean Economic Performance In 2025

The Bank emphasized that the first quarter of 2025 saw more dynamic activity than expected,largely driven by export-oriented sectors.

The Central Bank also reinforced its commitment to implementing monetary policy with adaptability, aiming to keep projected inflation within the 3% target over a two-year horizon.

Chile’s GDP saw a 2.6% expansion last year, exceeding expectations. This growth was primarily fueled by exports, with domestic demand playing a secondary role. Inflation closed out 2024 at 4.5%, with the interannual CPI in May at 4.3%, still above the targeted 3% goal.

Chile’s Key Economic Indicators

Expert Analysis

Economists suggest that The central bank’s cautious approach reflects a desire to balance supporting economic growth with managing inflationary pressures amid a volatile global landscape.

The ongoing monitoring of Middle East tensions and their potential economic repercussions will likely play a crucial role in future monetary policy decisions. Did you know? Chile’s economy is heavily reliant on copper exports, making it particularly vulnerable to global economic shifts.

What are your thoughts on the Central Bank’s decision? How do you think this will impact the Chilean economy? Share your comments below!

Switzerland And Norway Join Forces In Carbon Capture Breakthrough

Oslo, Norway – in a landmark move to combat climate change, Switzerland and Norway have formalized a bilateral agreement to enhance cooperation in carbon capture and storage (CCS). The Swiss Federal Department Of Surroundings, Transport, Energy And Dialog (Detec) hailed the agreement as a significant step forward in fulfilling the Paris Agreement.

Pioneering Carbon Capture Project ‘Longship’ Takes Center Stage

The agreement was cemented during Detec Head Albert Rösti’s visit to Norway, coinciding with the launch of the “Longship” project in Oslo. Named after Viking longboats, this initiative focuses on capturing carbon dioxide (CO2) from a cement plant and an incineration facility. The captured CO2 will then be transported by ship to a terminal on Norway’s west coast for injection and permanent storage beneath the seabed.

While carbon capture and storage technology is recognized as crucial in the fight against global warming,establishing a lasting economic model has proven tough,however,this collaboration is a major step forward.

Economic Opportunities And Financial Backing

The Norwegian government has pledged significant financial support to the Longship project, committing 22 billion crowns (approximately 2 billion euros) out of a total estimated cost of 34 billion crowns for the establishment and initial ten years of operation.

norwegian Energy Minister Terje Aasland lauded the project as a major leap for CCS in Europe during a press conference.

According to detec, the agreement provides a legal framework for the cross-border transportation and permanent storage of CO2.

Albert Rösti stated, “CO2 storage will be vital for switzerland on the path of carbon neutrality. This technology completes our current instruments of decarbonation. So I am delighted with this agreement with Norway. It strengthens innovation and is an opportunity for the economy.”

Swiss-Norwegian Pilot Activities Launched

Following the declaration of intention signed just a year prior, private companies from Norway and Switzerland have initiated pilot programs.

Over a dozen companies and stakeholders unveiled trade agreements on Tuesday concerning the transfer of CO2 removals between the two nations – a global first under Article 6 of the Paris Agreement.

These pilot activities, though small in scale, aim to determine how CO2 removal and its cross-border storage can be integrated into international climate policy.

Aspiring Climate Goals Drive Collaboration

Both Norway and Switzerland have set ambitious climate targets and view carbon capture and elimination technologies as vital tools to achieve net-zero emissions.

beyond the agreement with switzerland, facilities are scheduled to be inaugurated on Wednesday at a Heidelberg Materials cement plant in Brevik, southeast Norway. These facilities are expected to prevent 400,000 tons of CO2 from entering the atmosphere annually.

By 2029, The Hafinend Celsio waste incineration plant near Oslo is also scheduled to capture 350,000 tonnes of CO2 each year. The carbon dioxide, once liquified, will be transported by boat to the Øygarden terminal near Bergen.

From there, it will be injected into a pipeline for storage in a salt aquifer 2,600 meters beneath the seabed, located 110 kilometers offshore.

challenges And Costs Of Carbon Capture Technology

The Intergovernmental Panel On Climate Change (IPCC) supports CCS as a solution, especially for industries that are difficult to decarbonize, such as cement factories, which account for 7% of global CO2 emissions.

Though,the technology remains complex and expensive.

Currently, without financial aid, it is more economical for manufacturers to purchase “polluting permits” on the European Emission Quota Market (ETS) than to invest in capturing, transporting, and storing their CO2.

Tim Heijn, Director Of Northern Lights, a joint venture between Equinor, shell, and Totalenergies said “Two things must happen: it takes a gradual increase in the price of ETS in order to correctly reflect the real cost of the use of carbon (…) and our industry must really work to lower technological costs thanks to innovation.”

Comparing Carbon Capture Methods