Chile’s growing concern with soaring Peso and plummeting dollar in local market

Wednesday, April 24th 2013 - 01:06 UTC

Full article 7 comments

Chilean authorities are feeling “calmer” with the exchange rate nearing 480 pesos per US dollar, Finance Minister Felipe Larrain said on Tuesday, as the currency retreated from the year-and-a-half highs it reached earlier this month. Read full article

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Chicureo
“The Chilean government is required by law to run a fiscal surplus of at least 1% of GDP.”. This was brutal to acheive, but even our socialists support the concept.
Apr 24th, 2013 - 01:35 am - Link - Report abuse 0
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The Chilean perspective
Chicureo.......
If the developed economies ran their budgets like we do ours they would today be enjoying steady sustainable growth, instead they are stuck in rescecion for the forseeble future.
Apr 24th, 2013 - 02:58 am - Link - Report abuse 0
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Chicureo
#2 Agreed
I was a teenager during the Unión Popular and I remember how difficult it was for the recovery, especially with nearly everyone in the world against us. I highly recommend reading Hernan Buchi's ''The Economic Transformation of Chile.''
Apr 24th, 2013 - 03:40 am - Link - Report abuse 0
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Anglotino
Chilean Persepctive

Chile is my hero when it comes to Latin America. It makes the hard decisions and its people look at the effects of populism in its neighbourhood and shy away from it. If only more countries followed its example, though Peru and Cokombia are belatedly doing so now they are moving beyond their leftist insurgencies.

However you shouldn't lump all “developed economies” in the same basket, just as people shouldn't lump Chile in with Argentina and Venezuela and Brazil because of location.

Budget deficits during a downturn are acceptable to support growth and social stability as long as surpluses are run in the good times. This is what Australia does and it is what MOST of Europe didn't do.
Apr 24th, 2013 - 03:57 am - Link - Report abuse 0
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The Chilean perspective
3 Chicureo
I've got that book but I bought it in English. I found it a annoying translation, it doesn't flow so I might buy it in Castellano if I find it at a good price somewhere.
However there's no denying that Hernán Büchi is a cut above. I'd say one of the best treasury secretaries we've ever had.

4 Anglotino
Rather than borrow money when you run a budget deficit like Australia, Canada and most others do, we in Chile use one of two counter cyclical funds that we have overseas earning interest. Every year we deposit our surplus which about 1 - 2 % of the budget and when it is required we use our own money to fund stimulus packages. This money is topped up later once growth returns to the economy. If the developed world did this there would never be a serious recession. It would always be smooth sailing.
Apr 24th, 2013 - 12:04 pm - Link - Report abuse 0
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Brazilian
Certainly the devaluation of the US dollar doesn't have a good impact on the economies in Latin America...
Apr 24th, 2013 - 02:01 pm - Link - Report abuse 0
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Chicureo
The Americans are managing the Dollar terribly, and someday they'll have to pay for the consequences. Agreed #7
Apr 24th, 2013 - 02:30 pm - Link - Report abuse 0
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