Chile peso dips, stocks edge lower eyeing bond issue

SANTIAGO, May 8 (Reuters) - Chile's peso slipped to a fresh three-month low on Thursday, a day after the government announced it would back its currency intervention with additional local bond issuance.

Chilean stock indexes also moved slightly lower in afternoon trading, led by the transport sector.

The Chilean peso CHILJ <CLP=CL> slipped 0.25 percent to close at 471.70/472.20 per dollar compared with Wednesday's close at 470.50/470.80.

The peso retreated for a second day after the Finance Ministry announced on Wednesday it would issue another $800 million in local peso bonds.

The ministry said proceeds from the bonds would be used to buy dollars and to boost the reserves of the central bank, which has been buying $50 million worth of dollars a day as part of an $8 billion currency intervention to curb the strength of the peso against the greenback.

"The exchange rate is responding to the new bond issues announced yesterday. Inflation expectations, with gasoline prices rising are also having an effect," one analyst said. "High oil prices are affecting everything."

On the stock exchange, the all-market IGPA index .IGPA edged 0.20 percent lower to 13,737 points, while the blue-chip IPSA index .IPSA dipped 0.21 percent to 2,918 points.

Chile's leading air carrier LAN LAN.SN led blue-chip percentage losses as its shares fell 2.54 percent, while shipper Vapores VAP.SN retreated 1.95 percent.

Wood pulp exporter Copec COP.SN, weighted at 16 percent of the IPSA, fell 0.79 percent, while pulp and paper producer CMPC CAR.SN eased 0.92 percent.