Finance Minister Felipe Larrain Zoom Image
“This was one of the main measures that we had planned for this week because this is a measure that takes into consideration the exchange rate problem that we are facing,” Larrain told reporters at a customs office in the outskirts of Santiago. “This is not the last measure, we will keep analyzing alternatives.”
Larrain said the move, which was not as strong as many analysts expected, added to tight control over fiscal spending, use of copper savings and offering dollar credits to help exporters whose profits have dwindled because of the stronger peso.
The Chilean peso on Thursday pared some early losses triggered by the government announcement of possible foreign exchange measures. The peso was 0.19% weaker at 485.30/485.80 per dollar.
Chile has not yet followed the steps of other Latin American countries that have intervened in the market to temper their local currencies, which are rapidly appreciating on the back of greater capital inflows.
Investors chasing high interest rates provided by fast-growing emerging economies have swamped these countries with dollars, pushing up the value of local currencies.
Chile's central bank has also allayed market talk of a currency intervention in the short-term.
The Chilean peso has strengthened around 12 percent against the dollar since the end of June, prompting demands for action by exporters hit by rising costs.
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