Chile Attracts Record Foreign Capital in Public Debt
Chile is experiencing a significant influx of foreign capital, particularly in its sovereign bond market, driven by concerns over U.S. fiscal policy and domestic reforms that enhance the country's attractiveness to international investors.
The Chilean public debt has been attracting significant foreign capital, with non-resident positions in peso-denominated sovereign bonds reaching US$ 21.04 billion as of August, marking a 42% increase from the beginning of the year. This inflow is driven by growing concerns over the U.S.'s fiscal trajectory and economic reforms implemented under President José Antonio Kast's leadership, which include budgetary discipline and market deepening. Alexis Vega, Chief Market Formation at Banco de Credito y Ahorro, highlights: 'We've seen a decline in the share of U.S. bonds in investment portfolios, with some of these flows redirected to Chile'. The global phenomenon known as 'Sell America' (selling off U.S. assets) has shifted resources from the American market to emerging markets like Chile, reflecting a search for greater economic stability and more attractive yield opportunities. This trend is part of a broader context of reallocation of global portfolios amid political and economic volatility in the United States.
Source: Valor Econômico