Chilean peso appreciates after triumph of the Rejection in the plebiscite

The Chilean peso posted a 3.8% advance at the market opening on Monday. This, after the triumph of the Rejection (61.86%) to the proposal of new Constitution over the Approval (38.14%) in the plebiscite of September 4.
The first bets placed the local currency at 850.20 buyer units and 850.50 seller units, despite the limitation of operations in the market for a holiday in the United States.
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JP Morgan bank said the election result should have a positive impact on markets due to lower uncertainty and lower risk premiums ahead with expectations that the outcome could temper its plans.
“A more gradual and moderate reform push would help mitigate the dimension of uncertainty associated with the government’s economic and financial agenda,” the bank said.
According to experts, the referendum also became an assessment of the government, which is struggling with buoyant inflation, an economic slowdown and an internal security crisis.
“The results represent a major blow to President Gabriel Boric, with key tax and pension reforms likely to be diluted and delayed,” Eurasia Group said in a note.
However, he added that some changes are likely to eventually secure approval given the broad consensus on the need for more income, along with long-standing discontent with the pension system.

After acknowledging defeat, President Gabriel Boric also pledged an adjustment in his government team.

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Original source in Spanish

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