Chile’s Chaos Is Beginning to Look Like the End of an Era

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. Almost 40 years of steady growth has turned Chile into the wealthiest country in South America. It has little public debt, a large sovereign wealth fund and low, stable inflation, all of which has help build its reputation as a shining star in Latin America. But not anymore. Read more

Location