Chile will issue $12 billion in debt by 2023

Chile will issue $12 billion in debt by 2023
Chile will issue $12 billion in debt by 2023

“So we’re cutting emissions in half, because we’re going to have a total balance that’s going to be significantly higher than what was thought,” said Marcel, adding that the bulk will be used to refinance maturing issues.

The minister is convinced that Chile will quickly put an end to double-digit inflation.

“We are extremely confident that we will curb inflation sooner than other countries,” he said, referring to an early and consistent tightening of monetary policy that began in mid-July 2021.

PENSION AND PESO

The Chilean peso, like many other currencies, is under pressure from the strong dollar and broke the 1000 pesos per dollar mark for the first time last July.

The rate currently stands at 944 pesos per greenback, down nearly 10% so far this year.

Marcel said that between 100 and 150 pesos in the price is due to an uncertainty premium he believes rose in late 2019 as Chileans took to the streets for the biggest social protests in decades.

The COVID-19 pandemic and a series of votes in Chile, including a referendum rejecting a new constitution that would have greatly expanded social benefits, kept uncertainty high.

According to Marcel, clear signals for another moderate constitutional proposal, progress on tax reforms and hopeful pension reforms will help reduce uncertainty.

The pension reform is expected to be submitted to Congress in a few weeks and aims, among other things, to increase the basic benefit by about 30% and increase employer contributions by 6%.

“The pension reform should cost something between 4% and 5% of gross domestic product in the longer term,” said Marcel.

“It should take at least six years to process all of these increases so they don’t impact employment.”

The article is in Dutch

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