+33 680 38 14 46
Fruit Exporters seek government help for high valued dollar
Chile
Sunday 02 March 2008
Representatives of Chile's export industries met with Interior Minister Edmundo Pérez Yoma Tuesday to request government action in the face of an unfavorable monetary outlook. Industry members also expressed their fears that Chile's high interest rate (in comparison with the United States) will attract even more U.S. dollars, provoking a further decrease in the value of the dollar relative to the peso. That exchange rate is crucial to Chile's exporters, as a weaker dollar makes their products more expensive in U.S. markets.
According to the president of Chile's Federation of Fruit Producers, Rodrigo Echeverría, who participated in the meeting, returns on Chilean fruit exports stood to decrease by 10 percent in 2008 due to unfavorable exchange rates alone. The value of the US dollar has fallen from 520 pesos to 463 since late 2007, which accounts for the estimated decrease.
The fruit industry wants the government to impose a fiscal policy that would prevent the inflow of speculative foreign capital seeking to profit from the country's high interest rates. The influx of foreign capital would further depress the price of the US dollar with respect to the peso.
“We are trying to return to a policy that would fix the interest rates of Chile and the United States at an equal level,” Echeverría explained. Chile's rate is currently more than double that of the United States.
Such a policy is generally prohibited under Chile's free trade agreement with the United States, but the pact allows for an exception during “a critical year.”
Still, some industry officials suspect that 2008 might become that year for Chile's fruit exporters. In addition to a weak US dollar, the industry faces a severe drought and potential energy shortages that threaten to hamper production.
According to the president of Chile's Federation of Fruit Producers, Rodrigo Echeverría, who participated in the meeting, returns on Chilean fruit exports stood to decrease by 10 percent in 2008 due to unfavorable exchange rates alone. The value of the US dollar has fallen from 520 pesos to 463 since late 2007, which accounts for the estimated decrease.
The fruit industry wants the government to impose a fiscal policy that would prevent the inflow of speculative foreign capital seeking to profit from the country's high interest rates. The influx of foreign capital would further depress the price of the US dollar with respect to the peso.
“We are trying to return to a policy that would fix the interest rates of Chile and the United States at an equal level,” Echeverría explained. Chile's rate is currently more than double that of the United States.
Such a policy is generally prohibited under Chile's free trade agreement with the United States, but the pact allows for an exception during “a critical year.”
Still, some industry officials suspect that 2008 might become that year for Chile's fruit exporters. In addition to a weak US dollar, the industry faces a severe drought and potential energy shortages that threaten to hamper production.
