Exchange Rate Policy and Exchange Rate Interventions: The Chilean Experience

Sebastian Claro, Claudio Soto

Research output: Chapter in Book/Report/Conference proceedingChapter


In this paper we review Chile’s experience with exchange rate flexibility since the early 2000s. Since the abandonment of the target zone for the exchange rate at the end of the 1990s, the Central Bank of Chile has been strongly committed to exchange rate flexibility, allowing the exchange rate to fluctuate in response to different shocks. As a result, the floating regime in Chile has worked very well in different dimensions. In particular, we discuss how the credibility of the floating regime has significantly lowered the currency mismatch of assets and liabilities in the corporate sector and has enhanced the role played by exchange rate movements in adjusting the economy to financial and terms-of-trade shocks. In spite of its commitment to the floating regime, the Central Bank of Chile has intervened the exchange market on a few exceptional occasions. We review two of these interventions, which occurred in 2008 and 2011, discussing their mechanisms, effectiveness and potential drawbacks. Full publication: <a href="">Market Volatility and Foreign Exchange Intervention in EMEs: What Has Changed?</a>
Original languageAmerican English
Title of host publicationMarket volatility and foreign exchange intervention in EMEs: what has changed?
Place of PublicationBasel, Switzerland
PublisherBank for International Settlements
ISBN (Electronic)92-9197-962-7
ISBN (Print)92-9131-962-7
StatePublished - 2013

Publication series

NameBIS Paper No. 73g


  • exchange rates
  • floating
  • interventions
  • credibility


Dive into the research topics of 'Exchange Rate Policy and Exchange Rate Interventions: The Chilean Experience'. Together they form a unique fingerprint.

Cite this