SANTIAGO, April 23 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
"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.