PUNTA DEL ESTE, Uruguay, March 1 (Reuters) - Chile’s central bank does not have a set level that triggers intervention in the foreign exchange market, central bank board member Enrique Marshall said on Thursday.
The Chilean peso has firmed by 7.85 percent since the start of the year, putting increasing pressure on the central bank to resume its dollar purchases on the market to stem the local currency’s appreciation, which hurts exporters.
Many Latin American currencies have strengthened as regional economic growth attracts investors seeking higher returns than they can get in more developed markets. That has prompted currency interventions by central banks in Brazil, Colombia and Peru.
“We don’t have any reference level for intervening or not. We have to evaluate and have to see if the circumstances justify it and that’s what we’ve done in the past,” Marshall told reporters on the sidelines of a seminar on macroprudential policies organized by the International Monetary Fund and Uruguay’s central bank.
He said the bank’s policy was to intervene in “special or extraordinary” circumstances.
The peso is currently bidding at 481.50 per dollar. When the central bank intervened last year, it was trading at 465.50 and the bank made its move in 2008 when it reached around 430 pesos per dollar.
Commenting on the wider economy, Marshall said credit growth of about 12 percent was a “reasonable” level and had a healthy correlation to the rate of economic growth.
“In Chile what we are observing is an expansion of credit but it is still within a limited range, therefore there is no particular concern about that growth,” he said.
Chile’s central bank board said holding its key interest rate steady at 5.0 percent in February was coherent and pointed to a gradual and paused process of rate moves, minutes of the bank’s rate-setting meeting showed. (Reporting by Hilary Burke and Malena Castaldi; Editing by Andrew Hay)