Chile's Piñera: Peso On 'Normal Path'; Sees 6 percent 2010 GDP Growth

Riva Froymovich
The Wall Street Journal
September 22, 2010

Chile's strengthening peso remains on a "normal path," although the central bank has the tools to intervene in markets if necessary, said Chilean President Sebastian Pinera on Wednesday.

The peso has been fast appreciating against the U.S. dollar as U.S. interest rates remain low, leading investors to chase higher yields in emerging markets. Chile's economy is also growing faster, providing an alternative to the stagnant developed world.

"If you grow faster than the rest of the world your currency has to appreciate," said Pinera, particularly given the price of copper, the country's top export, is at elevated levels.

He was speaking at an Americas Society and Council of the Americas event in New York.

Pinera said strong fiscal policy will protect the economy from the effects of a rising peso, but the central bank has the tools to intervene if necessary.

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