Chile is on the brink of losing its hard-won reputation as the safest bet in Latin America following the biggest social upheaval in a generation. One month into a wave of mass protests Chile’s credit-default swaps are near those of the region’s other most stable countries, Bloomberg News reported. The gap between the spread on its five-year CDS and Peru’s has narrowed 21 basis points to two basis points. The gap with Panama has disappeared over the same period, with the Central American nation now 0.6 basis point below Chile.
At least two died and dozens were injured from looting and riots this weekend in Santiago and other major Chilean cities as protests against income equality intensified and spread across the country, Bloomberg News reported. The government has declared a state of emergency in the capital and four other regions in central Chile, giving it broader powers to enact security measures like curfews, for the first time since Augusto Pinochet was dictator. President Sebastian Pinera announced Saturday night that he would suspend the hike in subway fares that initially sparked the protests.