Chile: Chilean peso reaches weakest point in over five years
October 13, 2014
In September, the Chilean peso (CLP) has been losing ground against the U.S dollar, continuing the trend that began in February this year. On 30 September, the peso traded at 598 CLP per USD, which was 1.9% weaker than on the same day last month and 18.4% weaker on an annual basis. The currency reached its weakest point since April 2009 on 29 September, when it traded at 601 CLP per USD.
The depreciation of the Chilean peso comes as a result of a weaker growth outlook for the domestic economy, as well as a higher probability of the U.S adopting a tighter monetary policy. The expectation that the Fed will soon start to hike interest rates has decreased demand for risky currencies such as the Chilean peso. In addition, the falling price of copper—Chile’s main export—is also contributing to the depreciation of the peso.