Velasco Expects Wider Chile Current Account Deficit (Update1)

By Nathan Gill

     Nov. 27 (Bloomberg) — Chile’s Finance Minister Andres Velasco said the government now projects that the country’s current account deficit will widen next year, due in part to government efforts to stoke economic growth.
     The government will use “strong” counter-cyclical monetary policy, including increasing the current account deficit, to help stimulate demand across the domestic economy, Velasco said at an annual national business meeting in Santiago.
     “Chile has the access to credit and necessary liquidity” and “will act rapidly if necessary” to offset slowing growth, Velasco said.
     Lower prices for copper, Chile’s biggest export, on global market was “adverse“ for the country, though the lower price of fuel was positive for industrial production, the finance minister said. Chile’s imports continue to grow “vigorously,” and the lower value of the peso will help the country’s exports, he said.
     Velasco said the international financial crisis was the government’s top priority.
     Chile’s peso weakened 0.2 percent to 661.15 per dollar at 10:27 a.m. New York time from 660.15 late yesterday.

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