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via Global Investing

In Chile, what’s good for stocks will be good for bonds

 

Felipe Larrain, Chile’s finance minister is facing a new job come March when incoming center-left government of President-elect Michelle Bachelet takes over. An academic by profession, he intends to either make his way back into the cloistered lecture halls of a university, not necessarily in Chile, or work for some kind of international organization that is outside of the corporate or financial world.

Chile’s economy, one of the best run in Latin America, with the highest investment grade credit rating in the region, is however experiencing a soggy point in its economic cycle. Inflation has picked up. There is continued weak economic output and domestic demand is cooling down. The central bank is holding its benchmark interest rate at 4.5 percent and suggests more stimulus is to come in the months ahead. The currency has depreciated but that’s not a concern, Larrain said. He was more concerned when the peso was trading in the 430 per U.S. dollar range versus today’s 3-1/2 year low of 545, an area he describes as providing equilibrium.

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    • About Daniel

      "I'm a New York-based global investment correspondent with over 20 years of experience covering financial markets, business and foreign policy. My current post lets me roam across all asset classes and geography, from the developed to the emerging markets. I've reported and taught business and economic journalism from Asia, Europe, Latin America and the United States. Prior to joining Reuters I was a producer at CNN Business News in New York."
      Joined Reuters:
      1997
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