The U.S. dollar experienced a drop of more than 30 pesos in its quotation against the Chilean currency in the first transactions this Monday after the opening of the exchange market. José Antonio Kast, an advocate of a liberal economy, won the first round of the presidential elections this Sunday, heading to the runoff election.
The peso opened the day at just over 800 units to the dollar, compared to the more than 830 it traded on last Friday, which was the largest decline of the U.S. dollar since the Great Recession of 2008, according to Chilean media.
The head of studies of the trading company Capitaria, Ricardo Bustamante, pointed out to local newspaper Emol that the elections “have generated important changes in expectations”, especially due to the fact that the first majority of votes (27.94 %) was won by Kast, whom the markets are viewing favorably.
In addition, it is valued that the liberal economist Franco Parisi achieved an important support of almost 13%, since, in spite of not entering the second round, his support becomes key for the election of the president in the runoff.
Meanwhile, the candidate who will face the second round after obtaining 25.69% of the votes, Gabriel Boric, presents himself as the standard-bearer of a left-wing formation that counts on the support of the Communist Party.
“The high vote of more conservative candidates has supported a favorable scenario for investors, considering that they have more pro-market projects and economic policies that would reactivate investment and growth in the country,” said Bustamante.
For his part, the chief economist of BICE Inversiones, Marco Correa, told the newspaper La Tercera that Kast’s economic program “is perceived to be friendlier than Boric’s with the market, which would partially favor assets”.
Kast and Boric will compete for the country’s presidency in the second round of elections, scheduled for December 19.
Both are united as representatives of political forces founded a few years ago and of gathering the vote disenchanted with the current institutionalism, but their government programs differ completely in their political, economic and social nature.
Kast advocates for small government, lowering public spending and taxes, and promoting the free market, while Boric projects a transition towards a socialist state.