Chile’s peso dropped the most in two months after Finance Minister Felipe Larrain said intervention is a possibility after the currency rallied this week to its strongest level since September 2011.
The peso depreciated 0.3% to 468.65 at the close in Santiago, the steepest drop since Feb. 4. The currency finished at 467.05 on April 8, its strongest in 19 months and approaching the level where the central bank last intervened in January 2011.
Intervention is an option, and the Chilean government will act in coordination with the central bank, Larrain told reporters today in Santiago. Larrain is a non-voting member of the central bank’s board, which is due to announce its monetary policy rate decision tomorrow.
Larrain’s comments “are definitely hitting the exchange rate,” Ronald Volpi, the head of spot currency trading at EuroAmerica Corredores de Bolsa SA, said in a telephone interview. “We’ve also noticed strong demand from a large bank for dollars at these prices.”
Copper, which is Chile’s largest export, fell 0.6 percent to $3.4195 a pound in New York after two days of gains. The metal closed on April 3 at its lowest price in eight months.