Chile Peso Declines as Copper Sinks Amid Central Bank Pessimism

Chile’s peso fell to a six-year low, leading losses among major Latin American currencies, as the price of copper sank and the central bank expected economic growth forecasts to become more pessimistic.

The peso dropped 1.1 percent to 679.08 per dollar at 1:03 p.m. in Santiago, the weakest level on a closing basis since November 2008. A decline to beyond 682.75 would push the currency to the weakest level since 2003.

A retreat in manufacturing in China is draining demand for copper, Chile’s biggest export. The Asian nation is world’s largest consumer of the metal. The peso also fell as central bank president Rodrigo Vergara warned in an interview with La Tercera of further reductions in economic growth estimates this year.

“Vergara sent a clear message that the situation is more complicated than expected,” Raul Lopez, the head currency trader at Banco Penta, said in a phone interview from Santiago.

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