De Gregorio: Central Bank will continue exchange rate intervention program

SANTIAGO.- The Central Bank will continue a currency exchange market intervention program to acquire a total of $8 billion U.S. dollars in reserves by the end of the year since, according to the president of the institution; it is a “safety net” for the economy.

Analysts, such as Rodrigo Valdés (a former research manager for the Central Bank), have proposed a possible halting of the intervention, which has caused the peso to depreciate against the dollar, due to the belief that the low purchasing power of the local currency, coupled with hikes in oil prices, is placing pressure on inflation. 

“There are international risks (...) and those risks have not changed, so there is no reason to reconsider the program”, stated De Gregorio.

The intervention, which began in April of this year after the dollar reached its lowest value against the peso in more than a decade, is being carried out through the daily purchase of $50 million U.S. dollars at competitive auctions.

After closing out 2007 at a price of $498 pesos, the dollar fell to $430 pesos in March and has been rebounding ever since, to a current value of approximately $490 pesos as registered on Tuesday.