SANTIAGO (Dow Jones)--China's decision to increase the flexibility of the exchange rate of its currency, the yuan, bodes well for Chile, especially in light of high commodity prices, said Chile's Economy Minister Juan Andres Fontaine on Tuesday.
As one of Chile's main trading partners, China's increased currency flexibility could increase the Asian giant's appetite for Chilean exports, especially copper.
Chile currently produces 30% of the world's copper, and China is one of the biggest buyers of its local copper production.
The change in currency policy ensures China's rapid economic growth, Fontaine said at CorpBanca's (BCA, CORPBANCA.SN) annual Economics Seminar.
"The gradual appreciation policy in the currency is very compatible with a sustained expansion of demand," said Fontaine.
The minister said that the true risk from China's new monetary policy would more likely be on the side of inflationary pressures rather than deflation, but emphasized that the policy is positive for Chile.
The news from China and high copper and commodity prices make a "favorable" combination for Chile, Fontaine said.
As a result of China's weekend announcement, the peso appreciated against the dollar Monday, ending at CLP530.30, compared to Friday's close of CLP534.80.
-By Erin McCarthy, Dow Jones Newswires; 56-2-715-8939; Chile@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=6J5eLJMzFNhhAczxblxTrQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
June 22, 2010 12:42 ET (16:42 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
No comments:
Post a Comment