Central Bank of Chile Mentions Peso, Intervention Is Coming?
Chile’s central bank mentioned the rally of the Chilean peso in its monetary policy statement, leading to speculations that the bank would expand its dollar-purchase program to weaken the appreciating currency.
The Central Bank of Chile left its main interest rate at 5 percent on August 16. The central bank said in the press release accompanying the decision that “the peso has appreciated”. The currency has not been mentioned in the previous statements. The analysts interpreted the bank’s words as a hint at a potential intervention.
The statement was hawkish to some degree, saying that “domestically, output and demand indicators have evolved somewhat above projections” and ”internationally, financial tensions in the Eurozone have declined slightly and international financial conditions show some improvement”. Yet the central bank added that “the labor market remains tight” in Chile. As for the international woes, the bank pointed out that “advanced economies continue to post weak growth, while emerging markets have slowed down somewhat more than previously forecast”.
USD/CLP closed at 485.0500 and EUR/CLP closed at 598.3050 yesterday.
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Earlier News About the Chilean Peso:
- Chile's Central Bank Holds Main Interest Rate, Peso Advances (2012-05-19)
- Chile's Central Bank Maintains Interest Rates (2012-02-16)
- Chile's Finance Minister Worried About Strength of Peso (2012-02-10)
- Chilean Peso Rallies as Inflation Climbs (2012-01-07)
- Chile's Peso Goes Higher After Central Bank Maintains Key Interest Rate (2011-12-14)