Wednesday, January 26

Chile’s stock market collapsed and the dollar hit its highest historical price after Boric’s presidential victory

The leading index of the local market closed with a drop of 6.2% to 4,087.67 points, after sinking more than 7% during the day, while the dollar rose 4%, and reached its highest historical price at 876 pesos .

“Among the guidelines of the Boric program that most concern investors are the increase in the tax burden, the increase in social spending and the reform of the pension system,” Mercados G said in a note.

When asked about the negative performance of the markets, Boric said that they are “analyzing and reviewing, monitoring this type of movement.”

“It seems to me that the democratic decisions made by the Chilean people should not be subject to pressures that go along paths other than the democratic ones,” he said.

Boric, supported by a left-wing coalition with the Communist Party, has moderated his tone in recent weeks and in his first speech as president-elect he called for broad agreements, as well as promised to advance social rights with fiscal responsibility and taking care of the economy.

However, he also said he would oppose mining projects that “destroy”, such as a controversial iron and copper project.

BCA Research said in a note to clients that it expects a sizeable sell-off of Chilean stocks and currencies following Boric’s victory.

“Once the dust settles, a buying opportunity could arise in Chile. Political volatility will be contained and Congress will reject extreme policies,” the firm said.

The elections had the most massive turnout since voluntary voting was established in the country in 2012, with 8.4 million voters out of the 15 million eligible to vote.