Chilean pension funds have been given the go-ahead by the country’s financial regulator to invest in gold exchange traded products for the first time. The relaxation is part of a brace of reforms in Latin America, alongside Brazil’s decision to allow cross listings of overseas exchange traded funds in the form of depositary receipts, that could help breathe new life into the region’s stuttering ETF industry.
Category: Macroeconomy/Finance
Information regarding Chile’s finance sector and the country’s macroeconomy.
Meeting decarbonization goals by 2050 would add $31bn to Chile’s economy
Last April, the Government presented to the UN Climate Change the update of the Nationally Determined Contributions (NDC) to comply with the Paris Agreement, where the main goal is to reduce emissions until achieving carbon neutrality by 2050. In this context, the World Bank prepared a study to analyze the macroeconomic effects of the implementation of the decarbonization plan, which concludes that meeting the goal will allow Chile to increase the level of potential Gross Domestic Product (GDP) by 4.4%, which would mean adding $31 billion to the economy.
Fitch downgrades Chile’s Ratings to A-
Fitch Ratings has downgraded Chile's Long-Term Foreign-Currency Issuer Default Rating from 'A- to 'A-' and revised its Outlook to Stable from Negative. Fitch Ratings has also lowered Chile's LT Local Currency IDR from 'A+' to 'A-' and revised its Outlook to Stable from Negative.
AquaChile seeks financial restructure after $245 mn capital increase
AquaChile has called an extraordinary shareholders meeting for 29 October to vote on a $245 million capital increase and to realign the financial structure to incorporate companies acquired in 2018. Chile’s salmon sector saw significant consolidation in 2018, with national food giant Agrosuper buying 67% of AquaChile in an $850 million deal. The same day that deal was announced, AquaChile acquired Salmones Magallanes and Pesquera Eden for $255 million.
Chile’s Central Bank keeps benchmark interest rate unchanged at 0.5%
Chile's central bank kept its benchmark interest rate steady at 0.5% as the country maintains its efforts to revive the economy following the coronavirus pandemic. A central bank poll of traders last week predicted Chile's rate, its lowest in a decade, would remain unchanged for the next year at least.
Copper added 0.3% to $6,712 a tonne on LME
Copper gained as investors gauged potential threats to supply from Chile while pricing in more U.S. stimulus spending after the election and steady demand from China. Three-month copper on the London Metal Exchange (LME) added 0.3% to $6,712 a tonne after easing by 0.7% on Tuesday and rebounding about 50% since mid-March.
Government and ChileVamos evaluate proposal for new distribution of 6%
The Government worked hard to shape the guidelines for the pension reform project being discussed in the Senate's working committee. The design on which work is being done would originate from ChileVamos as a counter-proposal to the proposals presented by the opposition towards the end of July. The distribution of the 6% additional contribution is being considered: allocating 2% to individual accounts, 2% to savings and 2% to insurance. The latter would include longevity coverage, with the aim of ensuring the pension of those who survive the most in the mortality tables.
IMF forecasts a 6% drop in Chile’s GDP for 2020
The International Monetary Fund (IMF) projected that Chile's Gross Domestic Product (GDP) will decrease 6% this year, according to their October World Economic Outlook report. This projection marks an improvement for the Chilean economy with respect to the same measurement made by the IMF last June, when it pointed out that the national GDP would fall by 7.3%.
Chilean market analysts maintain 5.5% drop in GDP forecast for 2020
Chilean financial analysts are maintaining their forecast of a 5.5% drop in gross domestic product (GDP) for 2020, reported by the Central Bank of Chile. According to the bank's Economic Expectations Survey, analysts continue to expect the economy to recover with 4.5% growth in 2021 and 3% increase in 2022, as forecast in September's survey. Regarding the Monetary Policy Rate, the survey projected it will remain at 0.5% over the next 17 months, then rise to 0.75%.
World Bank board approves $12 bln for COVID-19 vaccines & treatments
The World Bank said its executive board approved $12 billion in new funding for developing countries to finance the purchase and distribution of COVID-19 vaccines, tests and treatments for their citizens.
