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MARCH 9, 2020

Finance Minister highlights Chile’s institutional robustness to cope with international market volatility

Finance Minister Ignacio Briones emphasized that “we have institutional mechanisms in place with all of the economic and financial regulators” adding that the Financial Stability Board, “an institution that responds precisely to this need for coordination, which is operative and active”, would be meeting this afternoon.

From La Moneda Palace, Finance Minister Ignacio Briones has called on the public to remain calm in light of the volatile scenario of international markets on Monday, due to concern over the impact of Coronavirus (COVID-19) on the world economy and for the failed negotiations among OPEC members on the magnitude of the cutback on oil production.

As he left the Policy Committee meeting, the Minister explained that, despite the nation’s current social, political and economic context, “we are well prepared institutionally and I wish to emphasize that.” To this end, Minister Ignacio Briones stated: “We have a robust institutional structure and financial regulation, and secondly, we have the institutional mechanisms for coordination in place with all of the economic and financial regulators.”

Furthermore, he added that the Financial Stability Board, “an institution that responds precisely to this need for coordination, which is operative and active”, would be meeting in the afternoon.

The Minister recalled that there is an expansive fiscal policy in place, with public spending to grow by more than 8.5% this year, “which will allow us to offset the eventual adverse effects our economy may undergo due to these shocks,” he added.

He also added that the country’s expansive monetary policy, implemented by the Central Bank, is helping to address the external shocks in the best way possible and continues to provide special facilities in support of the financial system’s liquidity. 

Minister Briones also underlined that the Government has several mechanisms in place to alleviate the liquidity of SMEs “that are suffering more intensely because they do not have the backing to cope with this type of situation. These mechanisms will continue to be available to support this sector, which is a significant source of employment.”

Ignacio Briones emphasized that, although the situation of the international markets affects Chile locally because it is a globally integrated economy, “the Government and State of Chile has the institutional mechanisms to respond as well as the coordination mechanisms, which have been activated with the country’s most important economic authorities. Therefore, I call on everyone not to overact to this effect of the international markets.”

Congress Agreements 

Minister Briones stated that it is important to agree on a timetable with the opposition in Congress to pass the proposed laws that would benefit thousands of Chileans as early as possible. These include the bills on Guaranteed Minimum Income and the Pension Reform.

“We cannot lose sight of the sense of urgency. Chileans are asking us for a permanent alleviation with respect to their incomes. Both draft bills are structural measures and the permanent incomes that this reform would create is even more necessary at a time such as now,” said Briones.

For this reason, the Finance Minister appealed to a republican spirit that would allow reaching the agreements needed to improve the quality of life of all Chileans.