Reuters: US Dollar Report: UPDATE 1-Chile cbank says not the moment for forex intervention

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UPDATE 1-Chile cbank says not the moment for forex intervention Oct 25th 2012, 13:23 Thu Oct 25, 2012 9:23am EDT * Chilean peso has strengthened nearly 8 pct this year * Cbank says reserves itself right to intervene * Chile cbank president says peso strength a worry SANTIAGO, Oct 25 (Reuters) - The Chilean peso's strength remains a worry but it isn't the moment to intervene in the foreign exchange market to stem its appreciation, central bank president Rodrigo Vergara said on Thursday. The peso has strengthened nearly 8 percent this year, sparking market speculation over a potential intervention. "Yes, it's a worry. We reserve ourselves the right to intervene if the situation deserves it, but if we haven't done it yet it's because we don't think it's the moment at least for now," Vergara told a business forum. 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 0.52 percent stronger at 478.50 per dollar on Thursday morning, buoyed by encouraging data from Britain and China and the U.S. Federal Reserve's latest commitment to support growth. Vergara's comments didn't appear to affect its movement. Chile's peso has firmed as an attractive interest rate differential compared with the developed world and high levels of foreign investment have kept dollars flowing into Chile, which is seen growing around 5 percent this year. The central bank's benchmark interest rate is 5 percent, compared with a U.S. overnight rate that is less than 0.25 percent, a gap that attracts capital to the South American nation. Link this Share this Digg this Email Reprints

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