Chile Forum

GJJIM wrote:I like the new Benjamin, especially the section that reads: "When in the Course of human events it becomes necessary"...

greg~judy wrote:Next trip back to NorAmLand... we gotta exchange them for a new pocket-full of these newbies

RuneTheChookcha wrote:1 Indian rupee = 0.147351127 Chinese yuan.

1 United Arab Emirates dirham = 12.3905247 Indian rupees.

1 Bahrain dinar = 9.74244923 United Arab Emirates dirhams.

Well, at the end of the day, if you grow faster than the rest of the world, your currency has to appreciate itself. That’s the way that the new wealth expresses itself and that is what is happening in Chile. Because we are, of course, our currency have been appreciated, but at the same time, we are still running a very huge commercial service.

And therefore, I think that the exchange rate, it’s in its normal and equilibrium range. So I don’t think that there will be major changes in the near future in our exchange rate. Now, of course, that we have to be very careful because we don’t want to jeopardize our export effort. And therefore, we are continuing to have a strong exchange rate, basically, by running a very, very serious and responsible fiscal policy. That’s our main contribution.

But with the price of copper beyond $3 per ounce, which I think will continue for a long period of time, I don’t think that our currency – our exchange rate is beyond the level of equilibrium. So we will continue to a strong exchange rate via a very responsible fiscal policy. But the central bank has some – also some tools to intervene. They have not been using them because share our view that the exchange rate is in a normal path.

And we are very careful with interest rate, of course, because our interest rates are still very low and I hope – I think that the interest rate in our country will start growing slowly, but steadily and probably we will achieve interest rates similar to what you are having in the U.S.

And another thing is that of course, because we compare exchange rate with the U.S. dollar, basically, and the difference that Chile is growing faster than the U.S. and we are running – we are think we are running a fiscal equilibrium while the U.S. is running a huge fiscal deficit. Those are the main two reasons why I think that Chile peso has been appreciated vis-à-vis the dollar.