Chile does not employ currency controls and allows capital to move freely in and out of the country making it easy to transfer money in or out of Chile. The value of the Chilean peso (CLP) floats freely, and the country’s market-oriented policies are favourable to foreign trade and investment. There are no restrictions on the amount of hard currency that may be carried in or out of Chile.
There are no constraints on incoming or outgoing foreign exchange transactions under a value of US$10,000 or its equivalent in foreign currency; above this threshold, non-resident individuals and companies are subject to reporting requirements, but few restrictions apply.
Chile’s openness to foreign investment and trade are a key source of economic growth; in 2013, trade accounted for approximately one-third of GDP, and Chile was the third largest destination for foreign direct investment in Latin America after Brazil and Mexico.
The vast majority of foreign exchange volume that takes place on Chilean platforms consists of CLP-USD conversions, which amounted to roughly US$10.5bn per day in April 2013. Euros are the next most frequently exchanged currency, though CLP-EUR exchanges represent one-tenth of the volume of CLP-USD exchanges (US$1.1bn per day in April 2013).
The Central Bank of Chile (CBC) sets national monetary policy, monitors foreign reserves and works to maintain price stability. In the past, the CBC maintained the peso within an exchange rate band - where the currency’s value is only allowed to fluctuate between two set values. However, the central bank relaxed its policy in September 1999, moving the peso to a free-floating regime in order to better respond to market supply and demand.
Today, the central bank uses inflation targets to anchor its policies. Inflation jumped to 8.7% in 2008, causing the peso to depreciate slightly (5%) against the dollar in the last quarter of 2008. However, inflation returned to a sustainable level in 2009 and ranged between 1.5% and 3.3% between 2009-2014, near the Central Bank’s target of 3% annual inflation.
An independent public agency, the Banking and Financial Institutions Supervisory Agency, exists to supervise banks and other financial institutions, ensure efficiency and security in the financial system, and to offer consumer protection.
Chile has signed some 22 Free Trade Agreements covering a total of 60 countries, which allow for the free movement of goods and capital with the major world economies. In the past, the country applied a one-year "lock-in" period for foreign investments, but abandoned the measure in 2000.
Today, foreign investors are largely subject to the same conditions as domestic investors. Incoming foreign direct investment (FDI) between a value of US$10,000 and US$2.5m is governed by the Central Bank’s Compendium of Foreign Exchange Regulations (Chapter XIV). Above this level, investment is regulated by the Foreign Investment Statute Decree Law 600 (DL600). Chile’s Foreign Investment Committee (FIC) is responsible for administering DL600 and engaging with foreign partners.
The national monetary unit, the Chilean peso (CLP), uses the currency symbol $, similar to the national currencies of Colombia and Argentina. The Central Bank of Chile issues banknotes in values of $1,000, $2,000, $5,000, $10,000 and $20,000. Coins are issued in values of $1, $5, $10, $50, $100 and $500. One peso is made up of 100 cents, but inflation rendered these values obsolete by the 1950s.
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