April 23, 2013 / 4:41 PM / 4 years ago

UPDATE 1-Chile officials 'calmer' as peso eases-finance minister

SANTIAGO, April 23 (Reuters) - Chilean authorities are "calmer" with the exchange rate nearing 480 pesos per U.S. dollar, Finance Minister Felipe Larrain said on Tuesday, as the currency retreated from the year-and-a-half highs it reached earlier this month.

The peso in early April had climbed to levels that had triggered a central bank currency intervention in early 2011 to stem its strength, but has since given up those gains in large part as prices for country's top export copper have tumbled.

"Undoubtedly, lower copper prices bring with them a weaker peso ... We're a little "calmer" with an exchange rate that today is near 480 pesos," Larrain told reporters.

The peso typically moves in line with copper prices, as higher prices mean more dollars entering the local market due to sales of the red metal. The inverse is true of lower prices.

Copper fell to a fresh 18 month low on Tuesday as disappointing economic data from top metals consumer China reinforced concerns over prospects for demand.

Chilean authorities had expressed concern about the peso earlier this month, after it breached 465.50 per U.S. dollar, its 2011 currency intervention levels.

In recent weeks, the bank has said a currency market intervention is one of the tools at its disposal, but it has also highlighted the costs associated with such a move.

The Chilean peso traded 0.27 percent stronger to bid 476.20 per dollar at 1:20 PM local time (4:20 PM GMT) on Tuesday.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below