November 14, 2019 / 1:18 PM / a month ago

Chile's dollar bonds rise after central bank plan to boost liquidity

LONDON, Nov 14 (Reuters) - Chile’s dollar-denominated bonds strengthened on Thursday after the central bank said it would take measures to boost dollar and peso liquidity in the financial system after weeks of social unrest.

The 2050 issue rose 1.3 cents, its steepest gain since Nov. 1, to 103.9 cents in the dollar, Refinitiv data showed. The 2026 issue gained 0.54 cents to 104.2 cents in the dollar, its largest gains since early October, according to Tradeweb data.

Chile’s Eurobonds have sunk to multi-month lows in recent weeks as protests over inequality and social injustices which have lasted for nearly a month showed little sign of abating.

The central bank said on Wednesday it will inject up to $4.0 billion through 30- and 90-day swap tenders and would also implement a REPO, or repurchase agreement, program.

In a note, JPMorgan said while the move aimed to help ease locals’ U.S. dollar funding pressures, it is likely to have a more limited impact on the dollar-peso spot rate. (Reporting by Tom Arnold, editing by Karin Strohecker)

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