“The persistence of this scenario raises the probability that significant distortions will be generated in the functioning of the financial market in general,” the institute said.
The global advance of the US currency since the beginning of June, together with a drop in the price of copper -Chile’s main export- and “local uncertainty” were the reasons for the agency’s advice to decide to intervene.
For this reason, between July 18 and September 30, a program of sales of dollars in the spot market will begin for up to 10,000 million dollars and the sale of foreign exchange hedging instruments for the same amount.
“The monetary effects in local currency of the operations of this intervention will be duly sterilized, so that the provision of liquidity in pesos is consistent with the monetary policy rate,” the bank assured.
Additionally, to increase the provision of liquidity in dollars, it will offer a currency swap plan for up to 5,000 million dollars, complemented by a liquidity program in pesos in REPO operations.
“These exceptional measures are consistent with the monetary policy scheme, based on an inflation target and exchange rate flexibility,” he said.
Earlier in the week, the bank had said that the current deterioration of the local currency has not significantly affected the financial system, although it said it would continue to assess the situation in order to act if necessary.
On Thursday, the Chilean peso closed down 3.7% to a record low of 1,045.80/1,046.10 per dollar. (Report by Fabián Andrés Cambero)
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
