September 29, 2010 / 12:31 AM / 9 years ago

Chile exporters urge cenbank to curb strong peso

* Exporters says stronger peso eats away profits

* Firms see intervention after 480 pesos/dlr - poll

* Cenbank has signaled no immediate intervention

SANTIAGO, Sept 28 (Reuters) - Exporters in Chile, a major producer of fruit, wine and wood pulp, on Tuesday urged the central bank to step into the forex market and curb a rapidly appreciating peso that has hurt profits.

The peso CLP=CL CLP= is trading at over 2-year highs of 480.50 per dollar as the economy of the world's top copper producer picks up steam amid a sluggish global recovery.

A stronger peso has weighed on the revenues of local exporters that are paid in dollars for their sales abroad.

The Manufacturing and Services Exporters Association, or Asexma, said exporters are quickly losing ground against competitors abroad due to a stronger currency.

A poll released by the trade group showed that more than 85 percent of the firms surveyed believe the bank should intervene when the peso passes 480 per dollar. The survey included executives at 112 companies within the trade group during August and September.


TAKE-A-LOOK on Chile’s economic recovery [ID:nN30113748]


The central bank has so far brushed aside talks of an immediate intervention in the currency after it reiterated late last week that the peso is in line with long-term fundamentals.

Still, bank President Jose de Gregorio has said future rate hikes would be faster without a strong peso, hinting of smaller rate increases that could take away some of the peso momentum.

A growing differential between rates in Chile and those in the United States and Europe has lured droves of investors looking for a quick profit, exponentially increasing dollar inflows and strengthening the peso.

Bank board member Rodrigo Vergara said in a speech published on Monday that emerging countries cannot rule out capital controls to ease currencies, but acknowledge its “effectiveness is even more disputed” than intervention.

The government of President Sebastian Pinera has said it plans to slow public spending, which could in turn help stem the sharp appreciation of the peso. (Reporting by Alonso Soto; Editing by Richard Chang)

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