Boric attributes part of the dollar’s record rise to uncertainty over Chile’s new constitution

the president of Chili, Gabriel Boricblamed this Wednesday the rise of the dollar, which for the first time reached 1,000 Chilean pesos, to external factors but also to the “uncertainty” that flies over the country due to the possible constitutional change.

“(The rise in the dollar) is tremendously worrying. There are different causes: the drop in the price of copperon the one hand (…) Now, there are also internal factors and in this the uncertainty, without a doubt, contributes”, he said in a press point.

LOOK: LIVE | Chilean President Gabriel Boric receives the draft of the new Constitution

“It is important that the different political actors give signs of certainty”added the president on the same day that the electoral campaign for the constituent plebiscite on September 4 began.

The main political parties and civil society organizations are defining their positions regarding this referendum, in which Chileans are obliged to vote if they want to replace their current Constitution with a new one that was completed last week.

LOOK: What is behind the increase in post-pandemic school violence that worries Chile?

After a year of work, the constitutional convention -of a progressive tendency- wrote a new proposal for a fundamental law that aims to expand social rights and leave behind the current one, inherited from the dictatorship of Augusto Pinochet (1973-1990) and reformed in democracy.

For months the polls gave the option of approving the new text as the winner, but there is more and more uncertainty and more polls indicate a greater citizen preference towards maintaining the current law.

EXTERNAL FACTORS

In addition to the national context, borik blamed the rise in the dollar on the poor performance of copper, derived from “the prospects of recession in Europe and the United States” and China’s decision to keep several cities closed due to the covid-19 pandemic.

The dollar reached 1,000 Chilean pesos this Wednesday around noon and closed the day at 965 pesosa new all-time high amid a global strengthening of the currency and in the face of a decline in the value of the red metal, the country’s main export.

According to the London Metal Exchange, the red metal – fundamental in energy transmission – fell to 3.4 dollars a pound on Wednesday, its lowest value in at least a year and a half.

Mining, which represents about 10% of the national gross domestic product (GDP), played a fundamental role in the country’s economic recovery after the pandemic for months.

After a historic rebound in GDP of 11.7% in 2021, the largest expansion in four decades, the Chilean economy is showing signs of cooling and registers an inflation unprecedented since the 1990s.

Source: Elcomercio

Ronald Payne

I, Ronald Payne, am a journalist and author who dedicated his life to telling the stories that need to be said. I have over 7 years of experience as a reporter and editor, covering everything from politics to business to crime.