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BCCH Reserves Program Note

CHILE
Two points have been noted by some analysts:
  • International reserves have been below the IMF's adequacy ratios. Therefore, the adjustment makes sense from a financial stability perspective.
  • BCCH may have also counted on potential future deviations of the REER stemming from Treasury hard currency sales. Hacienda sold about US$15bn in 2020 and will continue selling hard currency this year.

The timing could be seen as surprising given the hectic political schedule in 2021, however the statement does caution that in the event of extraordinary changes in market conditions, it may make adjustments to this program.


The currency is currently experiencing it's largest fall in a day since June 18 last year. The news has added to the significant negative news flow over the past week surrounding further lockdowns across the nation. Our technician highlights 757.18 next, which is the 76.4% of the downleg between Nov 24 - Jan 6

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