Since 1990, Chile has adopted, explicitly, an inflation targeting monetary policy. In small open economies, however, the Central Bank may have additional objectives; avoiding excessive fluctuations in the exchange rate and/or output that are not always explicit. In this paper we report estimates of the Chilean Central Bank reaction function. Following Clarida, Gali and Gertler (1998), we find evidence that the Chilean Central Bank has been forward looking: it responds to anticipated inflation deviations from target. In this context, we find that the Chilean Central Bank has some other implicit objectives; avoiding output and exchange rate fluctuations above those consistent with inflation targeting. Finally, the Central Bank's reactions to real exchange rate deviations are non-linear; it reacts strongly to large deviations rather than to small ones.