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The Santiago Stock Exchange closes with a sharp fall after the triumph of Boric in Chile

In the iamgen, a trader on the Santiago Stock Exchange.

One of the unknowns of this Monday of electoral hangover in Chile was how the markets would react to the triumph of the leftist Gabriel Boric. The dollar registered an increase of almost 4% this Monday, its highest daily rise since the 2008 financial crisis, reaching 876 Chilean pesos, a record high. The exchange rate has been trending upward since April. The Santiago Stock Exchange, for its part, closed its operations with a sharp fall of 6.18%. The markets had quite internalized the triumph of the leftist, but not the comfortable margin he obtained: 55.87% of the votes, over the 44.13% of the right-wing José Antonio Kast.

The negative reaction of the markets set some records: the dollar registered the largest daily jump since November 6, 2008, and exceeded the highest level since March 18, 2020 , when the entire planet was paralyzed as a result of the pandemic. Experts do not rule out that the currency will touch 900 pesos in the coming days.

The Santiago Stock Exchange experienced a volatile session until closing its worst daily performance since the day after the election of the members of the constituent convention, which was charged towards the left and independent options. The operations of the IPSA index, which brings together the most capitalized securities on the Santiago stock market, fell sharply by 7.45% in the first hours of the day.

This afternoon after his meeting with President Sebastián Piñera, Boric remarked that the changes that will be carried out in his government will be carried out under the premise of “permanent expenses with permanent income.” “Chile needs to have clear accounts, an orderly macroeconomy, otherwise the reforms that can be made end up going backwards. Permanent expenses have to be with permanent income, and therefore, we are going to advance in structural reforms but step by step, “he added, in a message of calm to the markets.

Analysts hope that once the president-elect reports who will make up his future government team, the uncertainty in the markets will disappear. As announced this Monday, before January 22, the team of the broad front should be known. The attention will be put especially in his letters in economic matter. Boric's program proposals include a tax increase to the richest 1.5% in the country and the elimination of tax breaks.

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