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With regards to the CLP, analysts at CIBC keep a neutral position into early 2021 driven by prolonged local uncertainties and populist measures in congress. Further impetus in commodity prices and better clarity on the current local election cycle could clear the way for gains following April’s regional and constitutional convention elections.

Key quotes

“USD/CLP appears to have found significant support around the 750 area.This level would prove difficult to break in the short-term as the CLP has already recovered most of the ground it lost late in 2019 and 2020. Moreover, we do not rule out the approval of populist measures in congress, and the resurgence of protests in a prolonged local election cycle.” 

“On the new constitution process, 78% of Chileans opted for the drafting of a new constitution on October 25. Chileans will return to the polls during the first half of April in the first of many votes next year.” 

“We do not expect significant support for the CLP as the BCCh maintains its position of leaving the overnight rate at the current 0.5% throughout 2021.” 

“We maintain our long USD/CLP bias for the rest of 2020 and into Q1 2021. However, our 2021 scenario for the CLP quickly improves following the dissipation of some local electoral uncertainties in H2 2021, where we see USD/CLP returning back to the 700-720 range.”


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