Exchange rate structural fiscal balance and copper price: a puzzle

Chile’s exchange rate shows a strong volatility to copper price fluctuations. This correlation is essentially because copper is our main export product therefore increases in the price of copper imply higher returns from copper export volumes both for private and the stateowned mining company Codelc...

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Autores principales:	Rojas Gutiérrez, Patricio, Berríos, Félix
Formato:	Artículo
Lenguaje:	eng
Publicado:	Banco Central de Chile 2019
Materias:	TIPO DE CAMBIO PRECIOS COBRE EXPORTACIONES
Acceso en línea:	https://hdl.handle.net/20.500.12580/3828
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spelling	oai-20.500.12580-38282021-04-24T11:10:29Z Exchange rate structural fiscal balance and copper price: a puzzle Rojas Gutiérrez, Patricio Berríos, Félix TIPO DE CAMBIO PRECIOS COBRE EXPORTACIONES Chile’s exchange rate shows a strong volatility to copper price fluctuations. This correlation is essentially because copper is our main export product therefore increases in the price of copper imply higher returns from copper export volumes both for private and the stateowned mining company Codelco. However from the early 2000s the Chilean state has used a concept of structural balance for its public accounts defining ex ante a copper price in order to formulate its budget spending. Thus increases above this price should not have a significant impact on the peso-U.S. dollar parity since most of the surplus revenue from higher copper prices would be saved overseas. Furthermore in general private mining companies do not bring into the country additional surplus revenues obtained from copper prices higher than what had been in their budget forecasting. 2019-11-01T00:06:59Z 2019-11-01T00:06:59Z 2015 Artículo 978-956-7421-48-0 https://hdl.handle.net/20.500.12580/3828 eng Series on Central Banking Analysis and Economic Policies no. 21 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 195-228 application/pdf CHILE Banco Central de Chile
institution	Banco Central
collection	Banco Central
language	eng
topic	TIPO DE CAMBIO PRECIOS COBRE EXPORTACIONES
spellingShingle	TIPO DE CAMBIO PRECIOS COBRE EXPORTACIONES Rojas Gutiérrez, Patricio Berríos, Félix Exchange rate structural fiscal balance and copper price: a puzzle
description	Chile’s exchange rate shows a strong volatility to copper price fluctuations. This correlation is essentially because copper is our main export product therefore increases in the price of copper imply higher returns from copper export volumes both for private and the stateowned mining company Codelco. However from the early 2000s the Chilean state has used a concept of structural balance for its public accounts defining ex ante a copper price in order to formulate its budget spending. Thus increases above this price should not have a significant impact on the peso-U.S. dollar parity since most of the surplus revenue from higher copper prices would be saved overseas. Furthermore in general private mining companies do not bring into the country additional surplus revenues obtained from copper prices higher than what had been in their budget forecasting.
format	Artículo
author	Rojas Gutiérrez, Patricio Berríos, Félix
author_facet	Rojas Gutiérrez, Patricio Berríos, Félix
author_sort	Rojas Gutiérrez, Patricio
title	Exchange rate structural fiscal balance and copper price: a puzzle
title_short	Exchange rate structural fiscal balance and copper price: a puzzle
title_full	Exchange rate structural fiscal balance and copper price: a puzzle
title_fullStr	Exchange rate structural fiscal balance and copper price: a puzzle
title_full_unstemmed	Exchange rate structural fiscal balance and copper price: a puzzle
title_sort	exchange rate structural fiscal balance and copper price: a puzzle
publisher	Banco Central de Chile
publishDate	2019
url	https://hdl.handle.net/20.500.12580/3828
work_keys_str_mv	AT rojasgutierrezpatricio exchangeratestructuralfiscalbalanceandcopperpriceapuzzle AT berriosfelix exchangeratestructuralfiscalbalanceandcopperpriceapuzzle
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Exchange rate structural fiscal balance and copper price: a puzzle

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