Reuters: US Dollar Report: UPDATE 1-Chile central bank sees no big short-term capital inflow

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UPDATE 1-Chile central bank sees no big short-term capital inflow Dec 19th 2012, 13:29 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Wed Dec 19, 2012 8:29am EST * Latin America worried about stimulus in developed world * Emerging market currencies have strengthened SANTIAGO, Dec 19 (Reuters) - Large flows of short-term capital are not flooding into Chile in the wake of the U.S. Federal Reserve's announcement of a fresh round of monetary stimulus, central bank president Rodrigo Vergara said on Wednesday. Investors chasing higher interest rate returns have also been lured by brisk growth in much of Latin America, as the debt crisis drags on in Europe and the United States' economic recovery remains tepid. " We don't see a big flow of short-term capital entering the Chilean economy," Vergara told a business forum on Wednesday. Chile's central bank on Tuesday hiked economic growth forecasts for both this year and next, adding that buoyant domestic demand and investments are seen remaining firm. Additionally, the country's key rate has remained on hold at 5.0 percent since a surprise cut in January, spurring investor interest amid very low rates in the United States and much of Europe. Chile's peso, for instance, has strengthened over 9 percent this year against the U.S. dollar. It is one of the strongest foreign currency performers against the dollar among 152 currencies tracked by Reuters. Latin American policy-makers are worried stimulus measures in the developed world will trigger more capital flows that could further strengthen the commodities-dependent region's currencies, its finance ministers said on Friday. Emerging markets have blamed loose monetary policies in rich nations for spurring destabilizing flows of hot money, and the IMF is trying to forge a consensus on when it makes sense for nations to resort to capital curbs. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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