Reuters logo
UPDATE 2-Chile president says looking closely at peso's strength
January 17, 2013 / 1:25 PM / 5 years ago

UPDATE 2-Chile president says looking closely at peso's strength

* Pinera says central bank has tools to intervene in forex
market
    * Peso has gained nearly 10 pct since beginning of 2012
    * Central bank intervened in 2011 to stem currency rise


    By Antonio De la Jara
    SANTIAGO, Jan 17 (Reuters) - Chilean President Sebastian
Pinera said on Thursday the government was looking closely at
the strength in the peso currency, which has gained
nearly 10 percent against the dollar since the beginning of last
year.
    Pinera said the central bank had the tools to intervene in
the currency exchange market, but it had to look at the peso's
long-term fundamentals versus the U.S. dollar.
    The peso, which ranked among the strongest foreign currency
performers last year against the U.S. dollar among 152
currencies tracked by Reuters, has been boosted by Chile's brisk
economic growth and healthy prices for its top export copper
. 
    It was trading at around 473.30 per dollar early on
Thursday, up around 0.3 percent from Wednesday. 
    "Of course we're permanently closely monitoring (the peso),"
Pinera told reporters. "The central bank has the ability to
intervene if it deems it convenient... But one must look at the
exchange rate's long-term fundamentals."

   
     The central bank deployed a dollar-purchasing program in
2011 to curb peso strength after it appreciated to its highest
level in more than 2-1/2 years at 465.50 per dollar.
 
    Officials in emerging markets have blamed loose monetary
policies in rich nations for spurring destabilizing flows of hot
money to developing nations, which have higher interest rates
than the near zero short-term rates in heavyweight economies
such as the United States and Japan.  
    Investors chasing returns have also been lured by brisk
growth in much of Latin America, as the debt crisis drags on in
Europe and the United States' economic recovery remains tepid.
    Chile's small, copper-dependent economy has mostly fared
better than expected despite slowing demand from top trade
partner China and fallout from the euro zone's crisis, because
of robust internal demand, a tight labor market and strong
investments.
    "Despite the Chilean peso's appreciation, which is a
phenomenon linked to a weaker U.S. dollar and has thus happened
in many countries, (local) exports continue to grow with much
strength and dynamism," Pinera added.

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