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Chile Central Bank Announces $25bn FX Intervention Programme

CHILE

Chile Central Bank has announced an FX intervention programme worth up to $25bn from July 18 until September 30, including:

  1. Spot USD sales of up to $10bn
  2. FX hedge sales of up to $10bn
  • The Bank cites the impact of dollar appreciation and a 30% decline in the price of copper as factors weighing on the Chilean peso since the beginning of June, with the local currency depreciating with "unusually high intensity and volatility" in recent days.
  • The monetary effect of these operations will be sterilised to keep peso liquidity consistent with the Bank's current monetary policy stance.
  • Spot USD/CLP hit all-time highs on Thursday threatening to amplify existing inflationary pressures. Earlier this month, FinMin Marcel said the government was looking into ways to alleviate the impact of peso weakness on local prices.

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