Chile’s central bank will start buying U.S. dollars off the local market to stop the continued fall of the currency, an announcement met by cheers from fruit industry groups.

Chile's Central Bank

According to a media statement, the central bank said it will start buying dollars off the local market on Jan. 5, and expects to acquire US $12 billion through the end of 2011.

According to local paper El Mercurio, the dollar  closed Monday at 465 CHP, its lowest rate in 32 months.

The currency has caused problems for produce exporters, who have seen their export returns erode as a result of its drop in value against the Chilean peso. After the announcement on Monday evening, the dollar shot up to 490 pesos as of 11:20 am local time Tuesday morning.

Chile’s fruit exporters association ASOEX called the announcement “great news” and urged the government to follow through with additional policies to guarantee the competitiveness of the export sector through a special fund.

The country’s fruit growers association Fedefruta also welcomed the news.

“We finally have a breath of relief and an opportunity to relaunch the fruit sector,” Fedefruta President Antonio Walker said in a statement.

Photo: Banco Central de Chile

Source: www.freshfruitportal.com