SANTIAGO Dec 28 Chile's peso closed
0.23 percent stronger against the U.S. dollar on Friday at
478.70, bringing the currency's accumulated gains versus the
greenback this year to 8.48 percent.
The peso, which has been boosted by Chile's robust economic
growth and healthy prices for top export copper, ranks
among the strongest foreign currency performers against the
dollar among 152 currencies tracked by Reuters.
"We believe that the factors that have boosted the peso are
going to continue in 2013, considering average copper prices
above $3.60 per pound, monetary stimulus and the local economy's
strength," said Sergio Tricio, head of research at Forex Chile.
A wide interest rate spread compared to developed nations,
with the local key rate anchored at 5.0 percent
since January, and the upward revision by Standard & Poor's of
Chile's sovereign credit rating, will continue to make the South
American nation an attractive destination for investments,
Analysts say that if the peso strengthens to around 465 per
dollar, the risk of the central bank intervening in the currency
Earlier this month central bank president Rodrigo Vergara
reiterated that intervening in the local peso currency market
was a tool at the bank's disposal, but that if it hadn't
intervened so far it was because it hadn't been deemed
He added that large flows of short-term capital are not
flooding into Chile in the wake of the U.S. Federal Reserve's
announcement of a fresh round of monetary stimulus.
The central bank deployed a dollar-purchasing program last
year, which lasted through December, to curb peso strength after
it appreciated to its highest level in more than 2-1/2 years at
465.50 per dollar.
STOCKS TURN OUT MEEK PERFORMANCE IN 2012
Chile's blue-chip IPSA stock index closed flat on
Friday as investors moved around their portfolios in a
high-volume, pre-holiday session, leaving its accumulated gain
in 2012 at 2.9 percent.
The country's financial markets will be closed on Monday,
New Year's Eve.
Disappointing corporate earnings, due to high energy costs,
rising wages and a corporate tax hike, and a slew of capital
increases weighed on the IPSA during the year. The local index
would have ended in negative territory if not for a 3.8 percent
increase in December.
"Next year we see the IPSA remaining under pressure until
April or May on a number of factors, including uncertainty
surrounding the U.S. fiscal cliff, stiff energy costs and
ongoing capital increases," said Alfredo Parra, analyst at
Santiago-based brokerage EuroAmerica.
Earlier this month, shareholders of Chilean energy group
Enersis approved a controversial planned capital increase of
nearly $6 billion, the biggest in the country's history.
A low base of comparison for corporate earnings, though,
will help fuel a 10 percent to 12 percent rise in IPSA for all
of 2013, Parra added.