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CLP Set To Extend Friday’s Significant Recovery

CHILE
  • USDCLP fell over 7% on Friday after the central bank announced a currency intervention program. A stabilisation in risk and the weaker greenback exacerbated the CLP strength on Friday, which may be further boosted to start the week.
  • On Friday, the BCCh outlined the schedule for their currency intervention program for this week. The details came shortly after President Rosanna Costa reiterated that the measures focused on stability, not boosting peso.
    • Chile central bank to sell $1b in spot market this week. Intervention in spot market will be $200m per day.
    • Chile central bank to sell $2.5b of forwards this week.
    • Chile central bank to buy $600 million of swaps this week. (BBG)
  • If Chile’s new Constitution’s draft is rejected in the referendum of Sept. 4, the country will hold a new process for another year and a half, President Gabriel Boric said, according to La Tercera who is citing an interview with CHV.
    • Chile would have to re-elect a brand new convention and “everything will have to be discussed again from scratch,” Boric added.
  • In the event that the rejection wins, 74% agree with starting another process that allows for a new Constitution according to the latest Cadem Survey – link here:
  • Finance Minister Mario Marcel and Central Bank President Rosanna Costa meet investors in New York as part of the Chile Day annual conference.
  • A light week on the data front with just June PPI data on Friday.

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