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Volatility Storm Adds to Pain for Chile's Battered Markets

  • Sovereign bonds trading at levels similar to the Philippines
  • Peso volatility was highest in world in September after ruble
relates to Volatility Storm Adds to Pain for Chile's Battered Markets
Source: Bloomberg

The last few months of white-knuckle trading in Chilean assets, on a par with the most unstable of its emerging-market peers, is erasing the final traces of the country’s reputation as the most stable of Latin America.

Peso volatility is the highest in the world after the Russian ruble, while local swap rates have swung at an almost unprecedented pace. That unpredictability has pushed many investors to the sidelines, with the nation’s sovereign dollar debt now trading at levels similar to the Philippines, rated two notches below Chile.