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Some Analysts See a Currency Crisis in Chile’s Peso Slump

  • Peso slid 4% Thursday as rate hike failed to reassure market
  • Chile’s going through ‘full-fledged currency crisis’: NatWest
A Chilean flag flies outside La Moneda Palace in Santiago, Chile, on July 13.

A Chilean flag flies outside La Moneda Palace in Santiago, Chile, on July 13.

Photographer: Tamara Merino/Bloomberg

A slump in the Chilean peso is reaching crisis proportions, damaging the reputation of a nation once touted as a beacon of light in otherwise murky emerging markets.

The peso has lost more than a fifth of its value since the start of June, hitting repeated record lows, under the weight of a strong US currency, weakening copper prices and concern over the writing of a new constitution. The currency tumbled 4% on Thursday, the day after the central bank hiked interest rates to the highest since 1998.