MercoPress. South Atlantic News Agency

Chilean exposure in Argentina

As happened with Spanish, Italian, British, Brazilian investors, Chileans have also been caught by the Argentine financial turmoil, and a Chilean government report admits it will "affect assets but there's no risk of insolvency". The clearly worded report indicates that the Argentine situation will not constitute a source of macroeconomic risk, however, "overall Chilean companies assets will suffer negative, but limited effects". In the report Chile's Finance Ministry indicates that the financial exposure is minimal 195 million US dollars, equivalent to 0,48% of all deposits and accounts in the Chilean financial system. However when it comes to direct investment, --mainly in utilities and grids--, Chilean companies have an exposure between 3 and 5 billion US dollars in Argentina, equivalent to 15,4% of all Chilean foreign investments. The report indicates the Chilean government will monitor the honouring of agreements and contracts, and if necessary will appeal to instruments contemplated in international law. Contrary to Spanish and Italian investors, whose governments even warned the president Duhalde administration, Chileans have remained very low profile and the Chilean government has given its full support to the new Argentine authorities. Argentina announced a cap on utility rates and an end to their link with the US exchange rate and inflation.