Posts
While all of Chile is captivated by the imminent rescue of its 33 miners, and President Pinera's popularity surges because of it, Finance Minister Felipe Larrain, 52, (Pictured) says there are NO current plans to implement capital controls to slow the peso's recent surge.
The peso has strengthened 11.5 percent vs the $usd in the past three months.
Central banks in Colombia and Costa Rica last month began buying dollars to curb their currency gains.
“Capital is very smart,” said Larrain. “You can say this short-term capital I don’t want, so they disguise it as long-term capital and they are really playing with the interest rate differential.” He said controls had mixed results when adopted in the past.
Larrain said the government will instead curb the rate of public spending growth. It is also hesitant to further tap the $12.5 billion in foreign reserves it holds to rebuild infrastructure after the February 8.8- magnitude earthquake that killed more than 500 people and caused $30 billion in damage.
