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Fundamentals of theFundamentals of the
Chilean EconomyChilean Economy
Central Bank of ChileCentral Bank of ChileOctober 2002October 2002
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Fundamentals of the ChileanFundamentals of the ChileanEconomyEconomy
MacroeconomicMacroeconomicandand
Financial StabilityFinancial Stability
External SectorExternal Sector
StrengthStrength
MicroeconomicMicroeconomic
& Institutional& Institutional
StrengthStrength
Financial SystemFinancial System
StrengthStrength
MonetaryMonetary
StrengthStrengthFiscalFiscal
StrengthStrength
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Monetary StrengthMonetary Strength
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Chile: Nominal Exchange Rate(CLP/USD)
250250
350350
450450
550550
650650
750750
9090 9191 9292 9393 9494 9595 9696 9797 9898 9999 0000 0101 0202
spot
central
parity
ceiling
floor
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Chile: Monetary Policy InterestChile: Monetary Policy InterestRateRate(%)(%)
* Before June 1995: PRBC 90 days rate
Nominal Int. RateCPI-adjusted Int. Rate
CPI-adjusted MPR
Overnight Rate *
-0,5
1,5
3,5
5,5
7,5
9,5
11,5
90 91 92 93 94 95 96 97 98 99 00 01 02
2
3,
4,
5,
6,
7,8,
9,
10
11
12
Nominal MPR
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Chile: Real Exchange Rate(index, 1986=100)
7070
8080
9090
100100
110110
120120
8686 8787 8888 8989 9090 9191 9292 9393 9494 9595 9696 9797 9898 9999 0000 0101 0202
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Chile: Long-Term Int. Rate: CentralChile: Long-Term Int. Rate: CentralBank InstrumentsBank Instruments (%)(%) CPI-adjustedCPI-adjusted
2
3
4
5
6
7
8
9
10
Sept-
02
Oct-9
2
Abr-9
3
Oct-9
3
Abr-9
4
Oct-9
4
Abr-9
5
Oct-9
5
Abr-9
6
Oct-9
6
Abr-9
7
Oct-9
7
Abr-9
8
Oct-9
8
Abr-9
9
Oct-9
9
Abr-0
0
Oct-0
0
Abr-0
1
Oct-0
1
Abr-0
2
PRC 8 years
PRC 20 years
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Fiscal StrengthFiscal Strength
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Fiscal Balance: Average 1992-2001
(% GDP)
-10-10
-8-8
-6-6
-4-4
-2-2
00
22
Argent.Argent.
BrazilBrazil
Chile
ColombiaColombia
Czech Rep.Czech Rep.
HungaryHungary
IsraelIsrael
KoreaKorea
MalaysiaMalaysia
MexicoMexico
PeruPeru
PolandPoland
ThailanThailan
Latin America CountriesLatin America Countries
Other Emerging EconomiesOther Emerging Economies
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Financial SystemFinancial SystemStrengthStrength
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ArgentinaArgentinaThailandThailand
South KoreaSouth KoreaJapanJapan
MalaysiaMalaysiaMexicoMexicoBrazilBrazilChileChile
Hong KongHong KongItalyItaly
AustraliaAustraliaGermanyGermany
FranceFranceUKUKUSUS
SpainSpainNetherlandsNetherlands
(15, amount 76)(15, amount 76)
Ranking of Banking StrengthRanking of Banking Strength(Source: Moodys, july 2002)(Source: Moodys, july 2002)
stronger
less strong
Chile: Financial Savings by Institutiona
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Chile: Financial Savings by InstitutionaInvestors(% GDP)
00
2020
4040
6060
8080
100100
19941994 19951995 19961996 19971997 19981998 19991999 20002000 20012001
pension funds
insurance companies
mutual funds
Chile: Domestic Corporate Bond
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Chile: Domestic Corporate BondMarket(USD billions)
(total outstanding)(total outstanding) (Issuance(Issuance
00
11
22
33
44
55
66
77
19941994 19951995 19961996 19971997 19981998 19991999 20002000 20012001
0,00,0
0,50,5
1,01,0
1,51,5
2,02,0
2,52,5
3,03,0
outstanding
issuance
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External Sector StrengthExternal Sector Strength
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Chile: Total Exports VolumeChile: Total Exports Volume(index 1990=100)(index 1990=100)
00
5050
100100
150150
200200
250250
300300
6060 6565 7070 7575 8080 8585 9090 9595 0000 00
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Chile: Exports by SectorChile: Exports by Sector(% total exports)(% total exports)
1960196020012001
Mining
Industry
Agriculture
19801980
Chile: Distribution of MerchandiseChile: Distribution of Merchandise
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Chile: Distribution of MerchandiseChile: Distribution of MerchandiseExportsExports(January-August 2002)(January-August 2002)
USA: 20%USA: 20%
Latam: 2Latam: 2
EU: 20%EU: 20%
UK: 5%UK: 5%
China: 7%China: 7%
Japan: 11%Japan: 11%
Rest of Asia: 12%Rest of Asia: 12%
Others: 4%Others: 4%
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Chile: Current Account Deficit(% GDP)
00
11
22
33
44
55
66
9090 9191 9292 9393 9494 9595 9696 9797 9898 9999 0000 0101 0202 0303 0404
forecast
Chile: Cumulative Investment
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Chile: Cumulative InvestmentAbroad(% GDP)
45
50