Chile peso falls to 7-week low, stocks edge higher

By Froilan Romero and Manuel Farias

SANTIAGO, Aug 20 (Reuters) - Chile's peso fell to a seven-week low on Wednesday as the dollar gained in international markets, while shares ended slightly firmer after sharp falls a day earlier.

The peso CHILJ <CLP=CL> closed 0.36 percent weaker at 522.80/523.30 per dollar compared to Tuesday's close of 520.90/521.20.

The peso has now depreciated 4.78 percent in 2008 to date after gaining 6.44 percent in 2007.

The local currency has weakened around 17 percent since the central bank introduced an $8 billion intervention program in April to curb a sharp appreciation of the local currency earlier in the year.

"We had a fairly volatile day given the peso opened much higher after global markets improved markedly, but then the dollar started to firm abroad and the local market followed," said one currency dealer.

"There was also greater demand for dollars after some pension funds started to buy, which put extra pressure on the peso."

Stocks ended slightly firmer after spending most of the session a shade weaker.

The all-market IGPA stock index .IGPA closed a provisional 0.16 percent higher at 13,448 points after falling 2.42 percent on Tuesday, when it was caught in Wall Street's slipstream.