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Credicorp Economist Predicts USDCLP at 780 By Year End

CHILE

Via Bloomberg article: Credicorp note that short-term economic fundamentals suggest the USDCLP rate should be below its current level.

  • CLP depreciation in 2021 has gone beyond what fundamentals suggest. Rapid economic recovery, successful vaccination process, sales of USD by the Ministry of Finance and positive terms of trade would favour the peso.
  • Other variables have raised fiscal concerns: political risk, withdrawals from AFPs and legislative initiatives in pension, tax and regulatory matters
  • Ministry of Finance would still have room to sell an additional $10b in FX in the local market.
  • On the other hand they note - slowdown in the Chinese economy could lead to lower copper prices and add pressure to CLP.

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