Chile’s central bank will sell up to US$20 billion in foreign currency interventions starting on Monday in a bid to stabilize the local currency after it hit a new all-time low, Reuters reports, citing a statement from the monetary authority.
The intervention program is to last through May 29, 2020, according to the statement issued on Thursday.
Chile’s peso plummeted to a new low for the second day in a row at market close on Thursday following more than a month of protests over inequality that have turned increasingly violent.
“The events that have occurred in our country in recent weeks have affected the normal functioning of the economy,” the central bank’s statement said.
The program will consist of a possible US$10 billion in dollar sales on the spot foreign exchange market and up to another US$10 billion in sales of “exchange hedging instruments”.
“This exceptional measure is consistent with our monetary policy, based on inflation targeting and exchange rate flexibility,” the statement said.
It said it would “continue to use all the tools available” to maintain the normal functioning of internal and external payments, and achieve its 3 percent annual inflation target.
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