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The Minister of Finance, Andrés Velasco, said that there has been an overreaction in the market causing leading to the latest dollar exchange rate changes.

“We do not think the market’s overreaction to news relating to copper, for example, is correct”, Velasco said, abstaining from pronouncing on potential speculation on the issue.

Andrés Velasco spoke about the topic when commenting, at La Moneda building, on the recent fall of the dollar exchange rate. On said regard, he said that the government “continues to be very active” on promoting measures to enhance exporting competitiveness, among which is the issuance of debt instruments in Chilean pesos, including for the first time, a 30-year term bond.

“This bond is useful to us when in need to spend in pesos in Chile.  For example, on pensions, instead of bringing dollars from abroad and liquidating them, we take the yield of said bond and spend those pesos. This way we minimize the number of dollars we bring to Chile and make a contribution – which the Government has been making and will continue to do so – for competitiveness”, Velasco explained, highlighting the fact that the government of a developing country like Chile has such degree of credibility in the financial markets to be able issue a 30-year term bond.

The Minister of Finance sustained that, in 2008, Congress authorized the issuance of debt instruments for US$ 2,000 million, in pesos, the issue of US$1,000 million having been already scheduled.

Velasco spoke about the topic at the end of the ceremony that marked the approval of the Pension reform, highlighting the approval of such a major reform within the first half of this government, without any negative vote.

Velasco said that people need a legitimate, supported and credible pension system and that is precisely what this reform accomplishes.

“Chilean society has a commitment with those who, for one reason or another, could not save for their pensions. If eligible, they will be granted the peace and dignity they deserve upon retirement. Today’s beneficiaries of assistance pensions amount to 408 thousand, once the new system is fully operating in a few more years, these beneficiaries will amount to 1 million 300 thousand Chilean citizens holding rights under the solidarity pillar of this new pension system”, Velasco pointed out.

Velasco added that AFP affiliates will also benefit from the reform by way of better pensions  “because there will be stronger competition among the institutions managing pension savings of all Chileans, lowering costs and providing a better service”.

As for related costs, Velasco remembered that the reform and its benefits will take effect gradually. “Here we do things seriously; we do not do things for giving a person a benefit one day, and take it away the next. The reform, when fully operating in the next decade, will cost 1 percent of GDP point of that time”, Velasco concluded.