Reuters: US Dollar Report: UPDATE 1-Strong Chile peso a worry but no intervention now-cbank

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UPDATE 1-Strong Chile peso a worry but no intervention now-cbank Sep 7th 2012, 14:10 Fri Sep 7, 2012 10:10am EDT * Conditions for currency intervention not met-central bank * Chilean peso has gained around 9 percent this year * Central bank intervened last year to beat back peso By Felipe Iturrieta SANTIAGO, Sept 7 (Reuters) - Chilean Central Bank President Rodrigo Vergara said on Friday that existing "worry" over the strong Chilean peso did not yet warrant intervention in the foreign exchange market. The peso has strengthened around 9 percent versus the U.S. dollar since the start of the year, sparking market speculation over potential intervention to curb peso strength, which exporters complain dulls their competitive edge globally. "Naturally, there is worry over the topic of foreign exchange," Vergara told reporters when asked about the peso's strength. "Conditions for an intervention are not met. Nevertheless it's something we have to evaluate from moment to moment. It's not something we can exclude." The central bank deployed a dollar-purchasing program last year, which lasted through December, to curb peso strength after it appreciated to its highest level in more than 2-1/2 years at 465.50 per dollar. The peso was trading around 0.36 percent stronger at 474.20 per dollar on Friday morning, buoyed as prices for Chile's top export copper rose to their highest in nearly four months. "The simple fact of not showing so much worry over the peso gives it room to strengthen a little more," said Sergio Tricio, head of research at Forex Chile in Santiago. He said a weaker global dollar and firmer copper prices could push the peso to strengthen further and even break the 470 per dollar level. Link this Share this Digg this Email Reprints

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