The Chilean peso hit the weakest level in three weeks as the national central bank slashed the benchmark interest rates to a record low for the South American country.

The Chilean central bank set the national interest rates to a record low of 0.5 percent, from a previous level of 0.75, in order to stimulate the emergent South American economy which has also suffered the consequences of the global slump. The copper, one of the main Chilean commodity exports, has also declined adding pessimism for the Chilean currency outlook. The peso, which was one of the best performing traded currencies in the first quarter, posted a weekly loss as risk aversion is back among traders.

USD/CLP closed the week at 551.15 from a previous rate of 548.75.

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