Currencies in emerging markets: dollar hits new high in Chile and Colombia

First modification: 07/13/2022 – 04:52

In Chile, the dollar closed above 1,000 pesos and reached a historical maximum of 1,026 pesos, all after the Central Bank announced in a statement that it does not rule out taking containment measures.

The Council of the Central Bank of the country of the Southern Cone assured in a statement that the exchange rate “could obstruct the formation of prices in the foreign exchange market and stress the evolution of other sectors of the financial market.”

According to the issuer, that “would require the intervention of the Bank in order to ensure the proper functioning of the economy.”

The rise in the dollar is due, according to experts, to the context of the global strengthening of the currency and the decline in the value of copper, the country’s main export, due in part to the restrictions that China maintains in several cities due to Covid-19. .

“The price of copper has fallen nearly 20% since the beginning of June, which has generated a deterioration in the terms of trade of our economy” and at a local level “the significant current account deficit, high inflation and levels of uncertainty have increased the sensitivity of the economy,” said the issuer.

According to the London Metal Exchange, copper fell to $3.3 a pound, down 3.31% from the previous day and its lowest value in more than a year and a half.

Chile accumulates a price increase of 12.5% ​​over 12 months, the highest level since 1994, and according to experts consulted by the Central Bank, it could close the year by 11%. For its part, in Colombia inflation reached 9.67%, the highest since 2000 and far from the Central Bank’s goal of 3%.

with EFE