MercoPress. South Atlantic News Agency

Chilean peso stabilizes in 600 pesos to the US dollar

Following months of constant appreciation the Chilean currency seems to have rebounded stabilizing above the threshold of 600 pesos to the US dollar.

The US currency has been recovering lost ground against the Chilean peso after having reached a minimum of 530 pesos.

Only a year ago, when Socialist President Luiz Inacio Lula da Silva took office and the war in Iraq was imminent, the US dollar reached a record 720 pesos.

However in the second half of last year with a stable Brazil and bullish international copper prices the Chilean peso began its appreciation process.

On several occasions Chilean exporters faced with increasing costs in US dollars demanded from the government the stabilization of the value of the US greenback above 600 pesos.

Record copper exports and revenue

Chile the world's main copper producer established an eight years export and revenue record last February prompted by excellent international prices and growing shipments of the metal.

Copper shipments which represent 40% of Chile's overseas sales totalled 865 million US dollars, a 56% expansion over the same month in 2003 according to a release from the Central Bank.

Exports in the first two months of 2004 reached 1,6 billion US dollars, a 27,4% increase over the same period last year.

The government's Copper Committee estimates that Chile will receive over 10 billion US dollars this year from overseas sales, 35% more than in 2003, working on the assumption of one US dollar a pound. However the price now stands at 119 cents the pound.

Chile holds 40% of the world's copper reserves and its industry is dominated by the government owned Codelco with some private participation, BHP Billiton, Anglo American, Phelps Dodge and Noranda.

However it's the rocketing international price that has jumped to an eight year high, 75% over March 2003, that has helped the recovery of the Chilean industry.

The drop in inventories and a strong world demand particularly from China have boosted sales and prices.

In 2003, Chilean copper exports totalled 7,4 billion US dollars, 17,5% over 2002.